Hidden Costs: The Socio-Economic Price of Coal

An essential element in effective managing is realistically measuring costs and benefits. Whether one works in business or government, measurement is inherently political; people's power, interests and even their jobs can be at stake. In some realms, measurement is also explicitly political. Energy is one of those, and the use of coal is one of the most contentious subjects. The inputs and outputs are frequently disputed, while the livelihoods of thousands can depend on the outcome of the debate. Honest assessment of the costs requires analysis of the health, safety and environmental impacts beyond the actual mining of the material. Coal is the most widespread heating source in many countries, in part because it is relatively inexpensive - depending on how one does the accounting. However, the costs do not end at the minehead.

Ariel Schwartz in Fast Company looks behind the data:

"A report from Harvard researchers in this month's Annals of the New York Academy of Sciences will reveal that coal use costs the U.S. between a third and over half a trillion dollars each year in health, economic, and environmental impacts.

Coal is the most popular electricity-generating fuel, with 40% of electricity worldwide generated by coal plants. It's a number that is only expected to grow; by 2030, electricity demand around the world will double. But while coal is cheap and abundant, it has plenty of hidden costs.

The report, written by Dr. Paul Epstein, associate director of the Center for Health and the Global Environment at Harvard Medical School, examines the life cycle of coal production to find "hidden costs," or costs that occur "when the activity of one agent affects the well-being of another agent outside of any type of market mechanism."

These costs include damages from climate change (like weather events and rising seas, public health damages from toxins released during electricity generation, deaths from rail accidents during coal transport, public health problems in coal-mining regions (in Appalachia, mountaintop removal contaminates surface and groundwater with carcinogens and heavy metals), government subsidies, and lost value of abandoned mine areas.

In Appalachian communities alone, public health burdens from coal mining cost $74.6 billion each year. Air pollutant emissions cost $187.5 billion, mercury emission impacts reach $29.3 billion, and greenhouse gas emissions (and accompanying climate change effects) from coal-fired plants costs between between $61.7 and $205.8 billion. And then there are the smaller costs--between $2.2 and $10 billion in impacts from land disturbances, and impacts from toxic spills, declines in property values, tourism loss, and crop damage.

The paper isn't too bullish on carbon capture and storage at coal plants, either, explaining that "in addition to the control technique not altering the upstream life cycle cost--significant obstacles lie in the way, including the costs of construction of suitable plants and underground storage facilities."

So what can be done? The world must phase out coal use--or face ever-increasing health and environmental costs. Alternative energy sources may be more expensive when the monthly energy bill arrives, but that is clearly only part of the story.