(Wyoming Business Report, January 24) – The federal “social cost of carbon” was recently revised to reflect as much as a 60 percent increase, slipped in with regulations changing standby mode power-consumption requirements for new microwaves by 2016. But a group representing coal interests said the social benefits should also be weighed in the interest of fairness.
The American Coalition for Clean Coal Electricity Wednesday released a study positing that the benefits of energy from fossil fuels are worth 50-500 times more than they have cost society.
“It’s imperative that policymakers also consider the actual and potential benefits of our carbon-based economy,” the coalition’s President and CEO Mike Duncan said in a release. “Fossil-based energy has powered three industrial revolutions, including today’s technology revolution.”
Consequently, Duncan said legislators and regulators should pursue policies “that continue the responsible use of fossil fuels – especially clean coal.”
The current social cost of carbon is about $36/ton, and ACEEE said even the most conservative estimates claim a societal benefit at least 50 times greater than that.
“And the benefits are actual fact; founded on more than two centuries of empirical data, not theoretical summaries based on questionable assumptions, dubious forecasts and flawed models,” said Dr. Roger Bezdek, the lead author of the report in the release.
Former Wyoming Gov. Dave Freudenthal, whose career started as a state economist in 1973, said it takes a lot of assumptions to come up with any statistic like the social carbon cost in a 2013 interview with the Business Report.
“That is an incredibly soft science,” he said. “When you finally get down to the individual rule and regulation level, it gets more difficult to be accurate.”
And the Wyoming Mining Association has said the social cost of carbon is just another way of placing hurdles for the coal industry.
“The Obama Administration has made it clear that it intends to use the federal regulatory process to halt the use of coal as an energy source, and this is but one more example,” said Travis Deti, assistant director of the Wyoming Mining Association in a 2013 email to the Business Report.
ACCCE in its release went on to criticize “unachievable” coal standards coming out of the U.S. Environmental Protection Agency that, in effect, ban commercially viable new coal plants.
“These regulations seem to ignore the $130 billion the industry has invested in clean coal technologies that have already reduced emissions by nearly 90 percent over the past forty years,” the release stated.
Duncan pointed out that fossil fuels have lent energy to farming, manufacturing, technology and business over the years.
“And while we have all benefited from reliable, clean coal electricity, there are still those who seek to end this American form of power,” he said.
Some see flawed assumptions and methodology in ACCCE’s study as well.
“A couple of years ago, Harvard studied the effects of coal on health in Appalachia,” said Richard Garrett, energy policy analyst and legislative advocate at the Wyoming Outdoor Council. “Their numbers are quite different than ACCCE’s. Perhaps this is not surprising since the coal industry funded the report by Management Services Inc.”
Garrett said he needed to spend more time with the ACCCE study to draw many conclusions, but offered that a summary of the Harvard report showed the public health burden of coal is probably about $74.6 billion in Appalachian communities alone. And the study estimated impacts from climate change due to coal combustion could be as high as $205 billion, though are probably closer to $62 billion.
“Clearly we are deferring a significant portion of the true cost of coal produced electricity to other sectors and future generations,” Garrett said. “That is particularly troubling when one compares the cost per kilowatt hour paid (which is quite similar according to both reports) to the reluctance of decision-makers to enable the funding of emission’s capture technology through higher rates per kilowatt hour.”
Garrett added that consumers “have often responded favorably” to higher rates if emissions can be lowered.
“The differences in rates across the country clearly show that there is an available elasticity in rates that is not being utilized in ways that would take coal from sloganeering to a technologically advanced clean-coal future,” he said.
Wyoming’s electricity is among the cheapest in the nation, something that has helped lure heavy electricity consumers like data centers to the state.