August 3, 2014

Coal and the Social Cost of Carbon

Is the Obama Administration for coal or against coal?  


Which do they believe is more important? Reducing emissions or their all of the above energy strategy? 

It is hard to tell if you read these two stories on two very different policies put in place by the federal government. 

In the first story, the federal government is ignoring its own social cost of carbon policies when it comes to setting coal lease prices. 

The Bureau of Land Management has leased 2.2 billion tons of publicly owned coal during the Obama administration, unlocking 3.9 billion metric tons of carbon pollution. This is equivalent to the annual emissions of over 825 million passenger vehicles, and more than the 3.7 billion tons that was emitted in the entire European Union in 2012. …
A ton of publicly owned coal leased during the Obama administration will, on average, cause damages estimated at between $22 and $237, using the federal government’s social cost of carbon estimates — yet the average price per ton for those coal leases was only $1.03. …
The carbon pollution from publicly owned coal leased during the Obama administration will cause damages estimated at between $52 billion and $530 billion, using the federal government’s social cost of carbon estimates. In contrast, the total amount of revenue generated from those coal leases sales was $2.3 billion.
The federal coal leasing program is the source of 40% of US coal extraction. One BLM field office in Wyoming recently proposed a plan that estimates new coal leases amounting to 10.2 billion tons, which would unlock an estimated 16.9 billion metric tons of carbon pollution.
Meanwhile, in another section of the federal government…. They are using the social cost of carbon to promote their agenda. 
Failing to adequately reduce the carbon pollution that contributes to climate change could cost the United States economy $150 billion a year, according to an analysis by the White House Council of Economic Advisers released Tuesday.
The report is part of the White House’s effort to increase public support for President Obama’s climate-change agenda, chiefly an Environmental Protection Agency proposal targeting coal-fired power plants, the nation’s largest source of planet-warming pollution. The E.P.A. will hold public hearings on the proposal, which are expected to be heated, this week in Atlanta, Denver, Pittsburgh and Washington.
The rule could lead to the shutdown of hundreds of power plants, a decline in domestic coal production, an increase in electricity rates and a fundamental transformation of the nation’s power supply. The White House has repeatedly sought to make the case that the long-term cost of not cutting carbon emissions — including longer droughts, worse floods and bigger wildfires that will damage homes, businesses and the nation’s infrastructure — will be higher than the short-term expense of carrying out the regulation.
Hmmm… What lessons can we learn from this experience? 
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