NCPA - National Center for Policy Analysis

ECONOMIC AND PUBLIC HEALTH BENEFITS OF COAL-BASED ENERGY

September 27, 2006

Two recent studies supported by the Center for Energy and Economic Development (CEED) show the significant benefits delivered by coal-fired power plants and the substantial harm that could result if environmental policies force a reduction in the use of coal, says attorney Eugene M. Trisko.

Researchers at Pennsylvania State University estimated the economic benefits of coal and the potential impact of replacing coal with more expensive energy sources such as natural gas and a 10 percent mix of renewables.  They netted out the positive offsetting impacts of investments in replacement fuels and electric generating capacity.  By 2015:

  • The annual benefit of coal use at currently projected levels is estimated at more than $1 trillion in gross domestic product (GDP), $360 billion in additional household income and nearly 7 million jobs.
  • In contrast, a 33 percent reduction in coal-fired electric power generation would reduce GDP by $166 billion, household income by $64 billion and employment by 1.2 million below what it otherwise would be. 
  • A 66 percent reduction in coal-fired electric power generation would reduce GDP by $371 billion, household income by $142 billion and employment by 2.7 million.

The negative impact of displacing coal would be felt nationally, regionally and in nearly every state, even after considering the positive impacts of replacement energy sources, says Trisko.

Shifting from coal-fired electric power generation to other forms of energy would have a small effect on CO2 emissions and an even smaller impact on climate change, but it would impose costs on the economy and thereby the health of Americans.  The benefits of coal, and the cost of eliminating it, should be weighed against benefits from the incremental reduction in air pollution and CO2 emissions.   Adding up the benefits and subtracting the costs, the ledger for coal remains in the black, says Trisko.

Source: Eugene M. Trisko, "Economic and Public Health Benefits of Coal-Based Energy," National Center for Policy Analysis, Brief Analysis No. 573, September 27, 2006.

For text:

http://www.ncpa.org/pub/ba573/

 

Browse more articles on Environment Issues