Report Reveals Huge Hidden Cost of Coal: $62 Billion per Year

Posted by Kristy Kershaw on October 21, 2009 at 4:11 pm

(image: abc.net.au)

Is coal cheap? As David Roberts of Grist.org reported Tuesday, that answer is not nearly as cheap as it seems.  Calling the findings from a National Research Council study on the hidden costs of energy “stunning,” Roberts asks readers to keep those results in mind the next time someone tries to say “coal is cheap.”

The report, spearheaded in 2005, focuses on externalities, an economic term used to denote hidden costs, those paid indirectly. For example, in the realm of producing and using energy, there are huge costs that are not necessarily passed along to the consumer, but paid indirectly through health-care spending or environmental-remediation costs. But as Roberts points out, costs are costs, and somebody has to pay them.

Even with the report ignoring costs associated with ecological damage, security, mercury pollution, and taxpayer impact to name a few, the NRC found $120 billion in hidden costs in 2005. Of that enormous number, $62 billion – over half – came from coal-fired electricity plants.

With coal representing 95 percent of the U.S.’s fossil fuels, and 50 percent of the country’s electricity production, these findings are a big deal. The coal lobby is also one of the major opponents of the current climate bill, as the industry would pay dearly under the proposed cap and trade system.  As for the effect on heating oil consumers, such costs amount to a huge subsidy for dirty energy sources, which eventually, and indirectly, leads to higher energy bills for everyone.