A Harvard University study published on Feb 17, 2011, has determined that the true costs of using coal to generate electricity in America are between $330 and $500 billion dollars annually. The study, "Mining Coal, Mounting Costs -- The Life Cycle Consequences of Coal" by the Harvard Medical School's Center for Health and the Global Environment examines the costs for so-called "cheap coal" that don't show up on the monthly electric bill: the so-called "externalities" or hidden costs. In a time of huge budget deficits, Americans -- and our leaders in Washington -- should be looking at these costs.
All businesses try to externalize their costs. For example, Toyota requires its auto parts suppliers to warehouse their parts and deliver them to the assembly line on a "just-in-time" basis, so that Toyota doesn't have to build huge storage warehouses. Toyota's just-in-time system thus externalizes their costs for warehousing the parts onto their suppliers.
In the 1960's, soda manufacturers sold their product in returnable bottles. There was much less litter, because people would pick up the bottles and return them for the 2 cent or 5 cent deposit. In order to increase their corporate profits, Coca Cola and Pepsi switched to aluminum cans and then to plastic soda bottles. Today our roadsides and streams are filled with trash, and over 40 percent of the litter is drink containers. The taxpayers foot the bill when highway workers clean up the trash, and the soda companies make bigger profits: they have externalized their costs onto the public.
Coal companies are adept at externalizing their costs. For example:
- When Appalachian streams become polluted with sediment and heavy metals because of mountaintop removal mining, the public pays to clean up the water so it's safe to drink -- but they don't pay the cost on their electric bill, they pay it on their water bill!
- When a child in North Carolina suffers an asthma attack or ear infection because of a coal-burning TVA power plant in Tennessee, the North Carolina family pays the cost of the child's medication -- not TVA.
- When a community in the Appalachian Mountains suffers from depreciated property values because a coal company is showering the town with coal dust, the homeowners pay the cost when they sell their homes and move away.
- And when heavy coal trucks destroy the roads and bridges in the mountain towns, the taxpayers have to pay to fix the roads -- not the trucking or coal companies. According to the study, the price of coal-generated electricity would be $0.18 per kW-Hr higher if it actually included these externalized costs.
A few years ago the Indiana University School of Medicine did a study and determined that the public health cost of burning coal for Hoosiers was $5 billion annually. Pollution from burning coal causes heart disease, lung disease, and asthma and puts mercury into the environment. The American Lung Association estimates that 24,000 excess deaths nationally are caused by pollution from coal-fired power plants every year.
In Kentucky, the Mountain Association for Community Economic Development (MACED) did a study which found that in 2006 coal generated $528 million in revenue for the state of Kentucky, but it cost $643 million in state expenditures. Similarly, in West Virginia, Downstream Strategies issued a report which determined that coal's net costs to West Virginia for 2009 were $97 million.
The numbers in the Harvard study are astronomical, and will hopefully stir some public debate about coal's true costs. About five years ago, when Ontario's leaders calculated the public health care costs of burning coal and compared them to other forms of electricity generation, they found that burning coal was overwhelmingly more expensive than renewables and hydro-power. Because Canada's public health care system means that the health care costs of burning coal are being paid out of government coffers, Ontario is now phasing out the use of coal.
Here in America, we just put the costs of coal on the backs of poor people without health insurance and little kids with asthma, while the coal company makes huge profits.
We often hear that alternative sources of energy, such as wind power and solar power are "too expensive" and not cost-competitive with "cheap" sources of energy like coal. Now we know that is not true.