“Coal-fired power stations are death factories”

These are the words of James Hansen. DEA has been reluctant to use these words in public statements, but they are clinically and epidemiologically correct. Perhaps more important in the eyes of government, coal fired power is uneconomic.

Yet in a society where ‘economic’ arguments hold sway, coal continues to be mined and burned because it has appeared to be the cheapest form of energy. However, as DEA has pointed out many times, the economic accounting is flawed because it does not include externalities. Looking at the panoplies of environmental and health impacts of coal it always seemed likely that coal was the most expensive fuel. The problem has been that the cost of these externalities has not been measured.

Professor Paul Epstein of the Centre forHealth and the Global Environment, Harvard Medical School is about to publish the costing of coal externalities in the New York Academy of Sciences. Some preliminary details have been published in the press in recent days and DEA has received some summary brochures from Paul Epstein.

The externality costs of coal are calculated to add 18c/kWh to the price of electricity in the USA and this cost may be as high as 27c/kWh. How are these estimates calculated and are they applicable to Australia?

The estimated costs in US$ billions are as follows:

Land disturbance; release of carbon and methane              $3 b

Public health burden in mining communities                    $75 b

Fatalities in the public due to transport by rail                   $2 b

Air pollution from combustion                                       $188 b

Mercury impacts                                                            $6 b

Subsidies                                                                      $3 b

Abandoned mines                                                           $9 b

Climate contribution from combustion                             $62 b

Epstein lists these figures as “best”. He also has a “high” calculation in which the climate contribution rises from $62 to $206. Analysis of the methodology for these calculations will have to await the full publication.

How would these figures differ in Australia?

Looking at the three big figure costs, probably not much difference. The mining communities in the USA are in Appalachia, which is very different geographically to New South Wales and Queensland but the structure of the communities and their complaints seem much the same as Australia. The climate contribution for combustion is a cost applicable to any country.

The figures were calculated for 2008 in the USA where the retail cost of electricity at that time was 10c. Adding the cost of externalities makes the cost nearly three times greater. A conservative estimate for Australia might be to double the cost

So if these costs are borne by the Australian taxpayer and health services why was the Rudd government offering big concessions to the coal industry on introduction of the CPRS? Unfortunately these matters are not based on logic; they are based on the power of industry and the harm they can confer on government if they do not get their way. The role of the mining tax in the departure of Mr Rudd will be firmly in the subconscious of the Gillard government or perhaps more likely buzzing around their collective cerebral cortex. It would be good if government at least had the courage to offer a level lobbying field with access by the Epstein’s of Australia being as easy as that of the big miners.

The recommendations from the study are as follows:

1. Comprehensive comparative analyses of life cycle costs of all electricity generation technologies and practices are needed to guide the development of future energy policies.
2. Begin phasing out coal and phasing in cleanly powered smart grids, using place-appropriate alternative energy sources.
3. A healthy energy future can include electric vehicles, plugged into cleanly powered smart grids; and healthy cities initiatives, including green buildings, roof-top gardens, public transport, and smart growth.
4. Alternative industrial and farming policies are needed for coal-field regions, to support the manufacture and installation of solar, wind, small-scale hydro, and smart grid technologies. Rural electric co-ops can help in meeting consumer demands.
5. We must end MTR mining, reclaim all MTR sites and abandoned mine lands, and ensure that local water sources are safe for consumption. (MTR= mountain top mining)
6. Funds are needed for clean enterprises, reclamation, and water treatment.
7. Fund-generating methods include : maintaining revenues from the workers’ compensation coal tax;
   b. increasing coal severance tax rates;
   c. increasing fees on coal haul trucks and trains;
   d. reforming the structure of credits and taxes to remove misaligned incentives;
   e. reforming federal and state subsidies to incentivise clean technology infrastructure.
8. To transform our energy infrastructure, we must realign federal and state rules, regulations, and rewards to stimulate manufacturing of and markets for clean and efficient energy systems. Such a transformation would be beneficial for our health, for the environment, for sustained economic health, and would contribute to stabilising the global climate

Most are applicable to Australia apart from those on mountain top mining.

The message for DEA is that it is appropriate that we have made exposure of the health impacts of coal our priority. This study adds to our ability to carry the case to the government and to those who finance mining and combustion. We have already raised these issues in a recent letter to all Labor member and senators.

David Shearman 18.2.2011