The True Cost of Coal Revealed

On the commodity spot market, you can buy a ton of Powder River Basin coal for $14.50. For $1740 you can get a 120-ton boxcar full. Top of the line coal from Appalachia, richer in BTUs, sells for much more: $111 a ton, or $13,320 a boxcar. In either case, though, the price does not reflect the true cost of coal.

Thanks to a report released by Greenpeace and the Dutch institute CE Delft (The True Cost of Coal), it becomes clear that when it comes to coal, there are no bargains. The report reveals and quantifies the true costs that have been left out of the cheap prices. It estimates -- conservatively -- that the damage caused by coal’s mining accidents, its global carbon dioxide emissions, and the illnesses it causes adds $451 billion in annual costs to the simple buying price.

That's not all. Not included in that dollar amount are damage estimates for acid mine drainage, mercury pollution or ground water contamination because reliable global estimates for the cost of these occurrences do not currently exist. The cost of CO2 used in the analysis was based on the current emission prevention costs under the European Union's Emission Trading Scheme - 20 Euros per tonne – a number that is expected to increase dramatically in coming years.

Today, 40% of the world’s electricity is produced from coal, creating 11 billion tonnes of CO2 emissions, or 41% of the emissions from fossil fuels. At current rates of new coal-fired power plant production, that number will increase to 60% by 2030.

The report asserts that while coal is considered a relatively cheap source of energy, that is only because externalized costs are not included in the end user price, but instead, incurred by society as a whole:

This damage doesn’t start and finish with the CO2 emissions caused during coal burning. The entire process – or chain of custody – from mining, through combustion to waste disposal, and in some cases recultivation has a dire impact on the environment, human health and the social fabric of communities living near mines, plants and waste sites.

It severely disrupts ecosystems and contaminates water supplies. It emits other greenhouse gases like nitrogen oxide and methane, as well as black carbon and toxic chemicals like mercury and arsenic. Leaking waste ruins fish stocks and agriculture, and therefore also livelihoods. It directly contributes to health problems like black lung disease.

All of the chatter and hype about “clean coal” during the recent election season was a false distraction from coal's dirty reality. Though the media is finally exposing the oxymoron of “clean coal,” the ravaging effects of true cost of coal is nowhere more apparent than in Linfen, China. Once rich in agricultural production, it is now rich in pollution, lung disease and cancer.

The report clarifies the true along the entire chain of custody.

Effects of mining coal: Deforestation, Soil erosion, Water shortages, Pollution, Coal fires, Greenhouse gas emissions, Lower water tables, Destruction of mountains, Dust particles and debris in surrounding communities, Destruction of surrounding plant life, Pollution of nearby water bodies through runoff, Black lung disease, Displacement of communities due to mining, coal fires, landslides and contaminated water supplies.

Effects of burning coal: Water shortages from cooling of power plants and “washing” of coal, Air pollution and smog, Lung disease, Mercury pollution, Greenhouse gas emissions, Acid rain

Effects after burning: Toxic coal combustion wastes laced with lead, arsenic and cadmium, Abandoned mines, Destroyed communities, Altered landscapes, Kidney disease, Cancer, Soil damage and water pollution from acid mine drainage, Destruction of fish and aquatic animals, Collapsing mines causing structural damage to nearby roads, bridges and buildings.

The report gives many examples of communities adversely affected by coal and the costs incurred that cannot be defined monetarily, including forced displacements, human rights violations and severe health repercussions. Despite all of the negatives of coal, garnering the political will to phase it out continues to be a struggle.

“As it currently stands, the market is tilted in favor of dirty energy sources so clean energy technologies are handicapped and not able to compete on a level playing field,” says report co-author Emily Rochon. “Barriers such as these are part of what is preventing a greater uptake of renewable energy. The question here is no so much one of technical capacity - we have the technology to transform our energy systems and make them clean - but of political will. Governments and industry are heavily invested in a carbon-based economy and the inertia behind that infrastructure is difficult to overcome.”

Greenpeace has laid out alternatives to continuing to use coal at current rates in their paper, energy [r]evolution (pdf). In it, they show how to cut global CO2 emissions from fossil fuels by 50% and deliver the world’s energy needs with renewables and efficiency measures. It recommends phasing out coal in some areas of the world and drastically reducing reliance on coal in others, saving an estimated $180 billion a year.

“What we are saying is that developed countries, such as the United States, Australia and the EU, should not build any more coal-fired power stations,” adds Rochon. “Any dollars invested in energy in these countries should be directed towards renewable energy technologies, energy efficiency and smart grid development. If we are to shift the emissions trajectory that we are currently on - which is leading towards a global temperature rise of 7 degrees Celsius - the sooner coal is phased out the better.”

As Greenpeace asserts at the end of the report, “leaving coal behind is the only way forward.”

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