The Washington Utilities and Transportation Commission has issued a directive to three utility companies in the state telling them to include the social cost of coal in their future planning. Under the new guidelines, the cost of coal calculation will be $42 per metric ton by 2020 and rise to $60 per metric ton by 2040.
Just exactly what is the social cost of coal? It is all the factors, known to economists as untaxed externalities, that degrade the environment or impact the health of human beings. With respect to fossil fuels, some of those externalities are melting ice sheets, rising sea levels, desertification, stronger hurricanes, flooding, and more forest fires.
With regard to human health, Physicians For Social Responsibility says the stuff that spews out of the smokestacks of coal-powered generating plants can kill us. It includes such things as “mercury, particulate matter, nitrogen oxides, sulfur dioxide, and dozens of other substances known to be hazardous to human health.” The executive summary of a report by the group entitled Coal’s Assault On Human Health begins with this sentence: “Coal pollutants affect all major body organ systems and contribute to four of the five leading causes of mortality in the U.S.: heart disease, cancer, stroke, and chronic lower respiratory diseases.”
It is the sum of all those factors that caused the International Monetary Fund in 2015 to report that total subsidies for fossil fuels worldwide every year amount to $5 trillion dollars. No, all that money is not paid in cash to the fossil fuel industry. The majority of it represents the economic cost of the damage done by fossil fuels, which is another way of saying the social cost of extracting, transporting, and burning coal, oil, and natural gas.
As many have pointed out, the current economic model prevalent in the world privatizes all the profits but socializes all the costs. It’s a “heads I win, tails you lose” proposition that rewards those at the top with unimaginable wealth while leaving the rest of us to pay for cleaning up their mess. Adding an amount to account for the social costs of coal and other fossil fuels is one way to start balancing the books and put some of the burden for the consequences back on the shoulders of the polluters.
Some would argue $42 per metric ton is too low a figure, but it’s a start. That number was arrived at after careful analysis by scientists and economist advising the Obama administration. Their findings were the basis of the Clean Power Plan so vigorously opposed by
conservatives reactionaries. If you would like to delve deeper into the process, the full Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 can be viewed online.
The three utilities subject to the new directives are Puget Sound Energy, Avista Corp, and Pacific Power. The three are all part owners of the Colstrip generating plant in Montana, one of the largest emitters of carbon emissions in the country. “The higher the (carbon) price, the less economic that facility will look, “ Ken Johnson, vice president of Puget Sound Energy, tells the Seattle Times. His company plans to end its reliance on coal by 2030.
The Colstrip plant has become controversial as the battle between fossil fuels and renewables has intensified. The plant is the largest employer in that part of Montana, where the residents are ardent supporters of Donald Trump’s policies that seek to re-invigorate the coal industry. So what if burning coal makes people live shorter lives and degrades their health while they are alive? We are talking about jobs, dammit!
That is an issue that gets too little attention. It’s easy to say we should stop burning coal. Any idiot with more than a fourth grade education knows polluting the place where you live is not an intelligent long-term plan. But how do we transition from an economy that is built on cheap, abundant power from fossil fuels to one reliant on renewables without destabilizing the entire economic system and jeopardizing the livelihood of all the people who depend on the existing model?
It’s a thorny problem and one clean energy advocates don’t give enough consideration. People on a stricken airplane don’t care about safety improvements that are coming in a few years. They want to be rescued now. To move the clean energy process forward, society needs to reassure those affected by the change that they will not be left behind.
In Costrip, Montana, Jim Atchison, executive director of the Southeastern Montana Development Corporation says, “We are working night and day to diversify the economy. We are a one-horse town, and would like to have two or three horses in the barn.” Those who campaign for clean energy should listen to Atchison and include sensible strategies to support the people who will be most affected by the transition. Only then will those affected buy into the new paradigm.