Calculating the True Cost of Coal

coal mine in Wyoming
Many of us who are keen environmental observers have long-ago adopted the habit of trying to account for the “hidden” environmental costs of a given industrial practice. We try to consider whole supply chains, with each link a potential contributor to the pollution stream.

Yet, without a way to calculate the actual cost – in dollars and cents – of these links, we cannot persuasively make the case against coal to the people who would support alt/renewable energy, nor to the politicians who may be more persuaded by industry donations.

But there is a ‘New Accounting’ in the land – an Ecological Economics — that promises to have a major impact on future assessments of Energy Industry activity.

A recent Harvard Medical School study took a long look at the entire industrial coal process – extraction, transport, processing and combustion — crunched the numbers, and came up with a rather shocking tally:

“We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually.”

Researchers (Epstein et al) included all known, so-called “externalities” (such as healthcare costs from pollution, or damage to ecological resources/services) in their analysis to account for the complete “life cycle” of coal in raw, monetary terms.

coal washer plant in Kentucky
Coal wash plant in Clay County, Kentucky

What accounts for this range of variation in annual cost is largely the fact that the impacts of many of these “externalities” are cumulative. It’s not like you just wipe the carbon slate clean, so to speak, each new year — you’ve still got the problem “swept under the rug” from last year, etc. And the cost of this accumulation of impacts is difficult to pin point precisely, especially regarding health costs.

Also, many coal operations are decades old, with previous, annual ecologic/economic impacts never assessed, or unknown.

Further, there are other factors most likely contributing to the study’s cost estimate range: uncertainties in the monetary costs of secondary links to the primary supply chain, variations in healthcare cost estimates from locale to locale, and additional impacts/costs from the separate industrial waste streams generated by each part of the chain.

The Farmington coal mine disaster kills 78. West Virginia, 1968
The Farmington coal mine disaster kills 78. West Virginia, USA, 1968

Identifying a ‘model region’, where the entire life cycle of coal can be observed, is crucial for making a realistic, if conservative, cost estimate.

Thus the researchers focused on only one region of the country (Appalachia) for their study in which the coal is extracted, transported, processed and combusted in the same region.  The researchers  suggest that results would be similar for other regions as there are many similar coal-producing regions and economies throughout the U.S.

One additional finding of the study: when accounting for these external costs, the researchers found that the cost of electricity per kWh generated doubles to triples. This doubling (the more conservative estimate) is enough to make wind, solar and some other renewable energies economically competitive alternatives.

Author comment:

It’s no wonder that the major Energy Industries want their subsidies preserved. The cost of these cumulative “externalities” (especially in states moving towards stricter enviro regs) has to get eaten by the company, eventually, while shareholders and CEOs want to maintain or grow profits. But this cumulative cost can only be “managed” in an unequal energy supply market (now even more so, given the study’s results). And it’s no wonder that the most polluting industries spend so much money supporting tax-write-off think tanks that deny anthropogenic climate change and seek to minimize/marginalize the push for renewables – their profit competitors.

The study was a multi-institutional, research collaboration, led by Dr. Paul Epstein of the Center for Health and the Global Environment, Harvard Medical School.

The study paper, Full Cost Accounting for the Life Cycle of Coal’, was published in the Annals of the New York Academy of Sciences (Volume 1219, Ecological Economics Reviews), Feb 17, 2011.

For more on estimating the costs of renewables versus fossil fuels, check out the earlier and related article: Cost of Wind Power — Kicks Coal’s Butt, Better than Natural Gas (& Could Power Your EV for $0.70/gallon) by Zachary Shahan.

Top photo: Surface coal mining in Wyoming in the United States. US BLM

Second photo: Coal wash plant in Clay County, Kentucky. Jfacew at en.wikipedia

Third photo: The Farmington coal mine disaster kills 78. West Virginia, USA, 1968 ‘ US GOV/MSHA

4 thoughts on “Calculating the True Cost of Coal”

  1. The externalities of surface mining and mountain top removal (MTR) mining are mUCH MUCH WORSE than deep mining. Looking beyond the emissions from burning the stuff, the process of mining, in partiular MTR, destroy entire mountain ranges, bury miles of headwater streams, pollute groundwater (hence well water), cause cancer and other disease clusters in communities, coal dust (hence asthma) in the mining towns, and much more. The culture and livelihood of Appalachia is under attack by MTR mining, and this practice should be banned immediately before any more damage is done. Learn more at

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