EnergyCost of coal greater than it seems

The cost of coal use is greater than it seems and policies geared toward subsidizing its use must be reformed quickly, before countries invest in coal-fired plants, Ottmar Edenhofer argues in a new article in Science.

The American Association for the Advancement of Science reports that the costs of generating electricity from wind and solar power have declined substantially in recent years, but coal still remains the cheaper option. Some major emitters such as China and the United States have pledged to reduce their dependence on fossil fuels over the next few decades to mitigate climate change — yet this will only cause world market coal prices drop, making coal more appealing to developing countries that are only now beginning to invest in long-term energy infrastructure. Yet this will only make world market coal prices drop, making coal more appealing to developing countries that are only now beginning to invest in long-term energy infrastructure.

What, however, is the true cost of coal? As Edenhofer points out, governments around the world heavily subsidize fossil fuels, and in 2013 pretax subsidies amounted to about $550 billion worldwide. These substantial subsidies not only drain funds that could be used for other purposes, such as sanitation and poverty reduction, but discourage investments in low-carbon alternatives. Furthermore, a recent report by the International Monetary Fund quantifies substantial additional costs of burning fossil fuels, such as local air pollution and other adverse side effects of vehicle use. Thus, the cost of coal usage can be deceptively low, and understanding the true costs — before long-term energy infrastructure is built — is essential, Edenhofer concludes.

— Read more in Ottmar Edenhofer, “King Coal and the queen of subsidies,” Science 349, no. 6254 (18 September 2015): 1286-87 (DOI: 10.1126/science.aad0674)