EcoNuz

In reply to comments on the More Coal Industry Propaganda post.

You are right, Jesse, the cost of power is important. Legislation does drive up the price of dirty energy, but it only brings the cost closer to the true social costs of power from coal. If you are a believer in the free market, then with some other economic principles you are likely to see that as prices go up, consumption goes down. Demand for electricity is elastic, just like the price of gas. When the cost in the US went up in 2008, consumption went down, causing the prices to drop again. It’s arguable that the cost of electricity generation does not fluctuate enough for there to be a dramatic effect, but that’s only true if there is only a single source of power.

As clean technologies become *relatively* cheaper, they are more cost competitive. For one, the economies of scale make clean technologies cheaper as more is bought. I did say relatively cheaper because even with prices stay the same, they become more competitive as the others go up. Even if clean options do not become more widespread, energy efficiency subsidies are being introduced, which will also benefit low income consumers and offset a large amount of the costs introduced by emissions legislation.

Energy markets right now are not free because there are a lot of subsidies and tax incentives for energy producers that are not incorporated in final energy prices.  The coal industry is very dependent on the railroad industry, which has been highly subsidized by the US government.  Oil companies receive tax incentives for exploration, and in states like CA have to pay disproportionately low taxes on sales of what they find.  Ignoring the cost of wars in the Middle East (because they were about terrorism, right?), the US protects shipping lanes used to import oil from the region, at no direct cost to oil companies.

The solution to saving money when coal gets more expensive is to stop using coal.  Many (not all) power companies offer options for consumers to buy their energy from renewable sources.  If that’s not an option, first reduce wasteful energy consumption.  Second, use subsidies to make your home more energy efficient.

The coal industry is right in that consumers should care about what they pay for energy.  However, keeping coal prices artificially low is not the answer.