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US Coal Subsidy $345 billion: Harvard Study

February 22, 2011

Through incorporating externalities into their lifecycle analysis, Harvard researchers have discovered the true extent of subsidies to coal in the United States:  $345 billion.

This implies a real cost of electricity production by coal-fired power plants of $0.178 per kwh – several times the accepted and oft-quoted cost of electricity, thereby significantly eroding the coal industry argument that coal is the cheap baseload power option.

The study, ‘Full Cost Accounting for the Lifecycle of Coal’, attempts to include a number of environmental and social costs, including scenarios for social costs of greenhouse gas emissions.

The researchers behind the study state that they have omitted many social and environmental costs, despite their efforts.

The implications of Carbon Capture and Storage options are also assessed, but are not considered to significantly alter the thrust of the conclusions of the study.

These findings and the approach are unlikely to significantly influence Australia’s energy policy, However.  Australian policy is too heavily influenced by the coal mining lobby.  The well-resourced and focussed interest of the industry will likely continue to carry more momentum than the disparate and unwitting victims of the negative impacts of coal combustion.


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