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KREUTZER: In the war on coal, the enemy is us
Question of the Day
Economic sanctions against North Korea and Iran have not brought those rogue nations to heel. Yet President Obama continues to believe that economic pressure, if turned up high enough, can force a change in behavior.
Accordingly, the president recently announced a plan to dial up the pressure to the highest level in another confrontation — imposing a de facto economic boycott of West Virginia, Wyoming, Kentucky and Pennsylvania. Admittedly, these are not rogue states. But they are coal-producing states — and in the eyes of environmental alarmists, that’s just as bad.
The president did not bill his Climate Action Plan as a boycott of coal-producing states, of course. But clearly he regards coal-fired power as Public Enemy No. 1 in the realm of environmental policy.
Unfortunately, the president’s war on coal entails tremendous collateral damage. Certainly his Climate Action Plan would kill the nation’s coal industry. But the economic fallout would reach into virtually every business and household in the nation.
Using a modeling system similar to that of the U.S. Energy Information Administration, the Heritage Foundation analyzed the economic effects of reducing coal-fired power by 75 percent by 2030 — a likely outcome of Mr. Obama’s plan. Obviously, it would devastate the coal industry. But the loss of affordable, coal-fired power also leads to a 20 percent increase in electricity prices and a 42 percent increase in natural gas prices — and those higher costs would spread throughout the entire economy.
The national income lost as a result of those price hikes averages out to $1,000 per family of four for each year, in the 15-year period starting in 2015. During that time, more than 500,000 jobs would be lost, more than 280,000 of them in manufacturing.
Yes, killing coal will bump up total renewable electricity generation. But considering how little renewables contribute to the nation’s total power production, the projected 41 percent increase in renewable production is no big deal at all.
Wind and solar can’t even come close to filling the void left by coal. No matter how fantastical the promises wind and solar advocates make, the Heritage analysis shows that renewables would replace only 4.5 percent of the lost coal power. Expanded natural gas production and diversion (from such uses as manufacturing) would make up 74 percent of the slack. But that still leaves the energy gap 20 percent unfilled. Why? Because people and companies simply cannot afford to use the same amount of energy at the new, higher price.
So much for reliable, cheap energy. According to Mr. Obama’s plan, energy is a luxury.
In a moment of candor, Obama climate adviser Daniel Schrag uttered a sentence that perfectly captures the mindset driving the Climate Action Plan: “A war on coal,” Mr. Schrag said, “is exactly what’s needed.”
Not surprisingly, neither Mr. Schrag nor anyone in the administration bothered to mention how utterly feckless this “war” is in terms of hitting its supposed target: climate change.
The 2009 Waxman-Markey cap-and-trade bill had much steeper carbon dioxide reduction targets, yet it would have had no discernible effect on temperature by 2050 and would have reduced temperatures by no more than 0.2 degrees Celsius by 2100. The Climate Action Plan would do even less. It’s just another Washington power grab masquerading as climate policy.
If you are worried about carbon dioxide emissions, the real game is in the developing world. Emissions growth there will swamp that of the U.S. and the developed world. In the past decade, China’s carbon dioxide emissions not only passed those of the U.S., they are now about double ours and are growing so fast that China no longer reports them.
The president’s anti-coal salvo is not the start of a new war on coal, but just the latest attack in an ongoing conflict. While coal mining employment drops 42 percent, there will be so much collateral damage that we could as easily call the policy a war on manufacturing, on affordable energy, on the economy — or simply, a war on us.
• David W. Kreutzer is a research fellow in energy economics and climate change at the Heritage Foundation’s Center for Data Analysis.
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