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Regulations on coal would devastate the economy like nothing before.
The National Interest, Fall 1999
In a world of models, this might not seem to be a very high price, but models have limitations. For instance, none
of them include the effects of carbon "sinks" (absorbers of gases such as trees) or of possible losses from
unemployment or inflation. Nor do they note that, by 2010, about half of our electricity will be coal-fired--most of
it consumed east of the Rockies where coal will fuel about 60 percent of electricity generation, with some states,
such as Ohio, being almost entirely dependent on that fuel. Meeting our Kyoto obligations, then, could entail
cutting the supply of electricity east of the Rockies by upwards of one-fourth. Many electricity-intensive industrial
plants (e.g., aluminum and chemical ones) would be shut down. The implied limit on coal would shutter most of
our steel industry, with our supply shifting to countries not constrained by the Protocol, which is to say the
developing countries. Those developing nations would have to burn coal to make steel to ship to us, so there would
be no net reduction in global emissions. More generally, if only the Annex B countries limit their high carbon-
using industries, such industries will expand elsewhere, a phenomenon dubbed "leakage." Lest one think this
implausible, consider that pollution controls in the advanced countries already lead to the construction of refineries
and chemical plants in less fussy, poorer ones. Relying on less optimistic assumptions than those of the ten
modeling teams, the Energy Information Administration of the Department of Energy comes up with a much larger
loss of U.S. output--about 3 percent of GDP by 2010 (roughly $300 billion in total, an amount equivalent to $960
per person or $3,800 for a family of four). This is akin to losing a year of economic growth between now and
2010. The loss could be higher still if, as is perfectly imaginable, congressional and bureaucratic micro-managers
decide which uses of carbon-based fuels are more or less socially worthy than others.

Regulations on the coal industry crush the economy. (carbon tax, gas turbines, co2 reductions,
Testimony of Dr. Harold Shobert, Director for the Energy Institute @ Penn State. Federal News Service June
8, 2000.

Listening to the barrage of problems, criticism, even invective, facing the coal industry, it is easy to forget that coal
is the backbone of America's energy economy. The majority share of electric power production, as well as much
process and space heating, belongs to coal. Most of us have heard some of the proposals that would adversely
affect the coal industry: a carbon tax, reliance on natural- gas-fired turbines for electric power generation, carbon
dioxide reductions, mandates for using "renewables", and of course the tired old epithet that "coal is a dirty fuel."
Global warming--real or imaginary, friend or foe...carbon dioxide emissions--a threat to the planet, benign, or good
for agriculture...while the debate rages on, the debaters occasionally pause long enough to agree on one point: coal
is the "bad guy." According a 1995 EIA estimate, coal reserves are about a trillion tons worldwide, more than 235
times the world's annual consumption. Unquestionably, coal has great potential as a future source of energy. There
is little doubt that coal combustion must continue as a major contributor to the energy economy for the near- to
mid-term future. However, environmental pressures may militate against expanded markets for coal as an energy
source, and the problem is likely to be carbon dioxide emissions. The National Research Council (NRC) pointed
out in 1995 that, "Of all the environmental issues facing the future use of coal, none is as potentially far reaching
as the worldwide concern over global climate change". The heat generated in arguments about the Kyoto Accord
sometimes seems to be about as large as the heat generated by burning the world's annual coal production. It is
likely that environmental pressures on present-day, conventional coal utilization will only intensify. This factor,
taken by itself, would cause us to question the long-term future of the coal industry. Environmental issues also
severely impact the metallurgical coke industry, the present source of most chemicals from coal. The traditional
coal industry and coal markets in the dawning of the 21st century are under increasingly intense assault.



Economy Disadvantage


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