The Real Cost of Coal? $523,303,948,403 and counting

Guest Blog | February 25, 2011 | Coal, Energy Policy
sb10069200ak-001If you live in the Southeast you, as an individual, probably consume around 6,300 kilo-watt hours (kWh) of electricity each year*. The national average cost of residential electricity is 11.51 cents per kWh. This means that you are paying approximately $725 each year for your electricity, which mostly comes from coal. Your annual bill would actually cost you upwards of $2,500 if it accounted for the many external costs of using coal for power like the impacts of mining and transportation on our air and water, climate impacts, and the affects on public health from coal pollution.

This data is according to a recent study from Dr. Paul Epstein with the Center for Health and the Global Environment at the Harvard Medical School. The study looks past the dollars actually spent on purchasing electricity and undertakes a “Full cost accounting for the life cycle of coal“. Dr. Epstein and the other authors conclude that the true cost of coal, not just the price we pay on our electricity bills, ranges between $175 and $523 billion dollars worldwide each year.

This new report is crucial to understanding the way that coal power actually impacts our lives. While we enjoy our high standards of living in part because coal has helped to provide the energy we need to thrive, we have vastly underestimated the true costs of coal on our health, our environment, and our pocketbooks. We are in the age of the internet, not the age of the industrial revolution, and it is time for society to recognize that we can and must move away from coal to cleaner, healthier, and more sustainable forms of energy. If plumes of air pollution and deluges of coal ash are not enough to drive home this point, then this new research from Dr. Epstein on the economics of coal may tip the scale.

The paper, published in the coversmokeAnnals of the New York Academy of Sciences, looks to the remarkably long list of impacts of coal including land disturbance, methane emissions from mining, carcinogens released into the environment, public health impacts in mining communities, fatalities in the transportation of coal, emissions of air pollution during combustion, impacts of mercury during combustion, climate impacts and more. The study also looks at the toll on human life, the dangers to fetal and child development, the illnesses suffered by miners and by mining communities, the sheer devastation from blowing off the tops of mountains, and the slow and hidden poisons leaking from coal ash impoundments. And then it calculates the costs of all of these factors worldwide.

These cost figures are extraordinary, and they aren’t necessarily reduced when modern pollution control equipment is added to half-century-old coal plants. Pollution control equipment only accounts for air pollution, just one of the many costs associated with coal power. And the authors explain that a carbon capture and sequestration facility, designed to reduce carbon emissions and thereby climate change, could actually require a coal plant to burn 25-40% more coal. More coal means more costs and environmental impacts associated with mining, transportation and storage of coal waste.

Using the authors’ estimates, we can calculate the costs associated with energy produced at our Southeast coal plants by considering their total electricity output in kWh and the report’s estimates of external cost per kWh. For example, Plant Scherer in Georgia imposes the most costs on society at $6.5 billion each year. Dolphus Grainger in South Carolina generates the fewest external costs still at a whopping $51 million. The chart below shows the most expensive plants in each state in the Southern Alliance for Clean Energy’s region.


If you look at all the plants in Florida, South Carolina, North Carolina, Tennessee and Alabama, they account for $85,594,777,367 each year in external costs that are not included in our electricity bills.

Depending on where you live, you might get part of your electricity from one or more of these plants and think to yourself that a few cents per kWh isn’t so bad, but as the authors conclude in this study, “The economic implications [of coal] go far beyond the prices we pay for electricity.”

In fact, the authors even admit that their study could not represent the complete costs of coal — some factors are simply too hard to quantify.

For example, the study

“omitted the impacts of toxic chemicals and heavy metals on ecological systems…the direct risks and hazards posed by sludges, slurry and [coal ash] impoundments; the full contributions of nitrogen deposition…the prolonged impacts of acid rain and acid mine drainage; many long-term impacts on the physical and mental health of those living in coal-field regions and nearby [mountaintop removal] sites; some health impacts and climate forcing due to increased tropospheric ozone formation and the full assessment of impacts due to an increasingly unstable climate.”

Yet, even without all of these important factors, it is still very easy for the authors to reach their overall conclusion:

Accounting for the many external costs over the life cycle for coal-derived electricity conservatively doubles to triples the price of coal per kWh of electricity generated.

While the authors don’t say how people like us can respond to this striking study, we at SACE know that first and foremost, we can make personal decisions to reduce our electricity usage and increase the efficiency of the electricity that we do use. Second, we need to push Congress and the Environmental Protection Agency to adopt rules that help reduce these costs by taking the oldest, dirtiest, least efficient and most expensive coal plants offline. We are at the very beginning of moving society away from coal and it is absolutely crucial that we appreciate the meaning of new information like this and use it to transition into the future.

*Individual electricity consumption is based on 2008 residential retail electricity sales and state populations. Electricity consumption is often also measured by households, which have a higher level of consumption than individuals.

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