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If You Price It, They Will Come.


There has been a lot of talk about pricing carbon. Mostly from people who are dead set against it. They argue that pricing carbon will do nothing to reduce emissions.

They lie.

The above chart is interesting. Interesting for many reasons. As you can clearly see, the production of energy per MWh (estimated at 2006 costs) is cheapest when one uses coal as the power source.

All well and good. However there is an something important to note since that 2006 cost estimate. That is the price of coal has tripled to quadrupled. Last year the cost of thermal coal per tonne hit close to $150 a tonne. It has since slide back to around $130 a tonne.

But as all the climate deniers will love to tell us, the DEMAND for coal has increased world wide. And when I did economics 101 at high school, that means the price will continue to rise.

But that is not the only cost a coal fired plant has to pay. They also need to pay the freight costs to get the coal to the power plant and the cost to ship the solid waste away. All these costs are directly put on the heads of consumers.

I bet you have been wondering why the price of electricity has been going up. If  the cost of generating the electricity goes up, so do your bills.

Placing a price on carbon increases the costs to generate electricity per MWh. It’s that simple.

Now while the cost of resources have been rising, the technology in regards to renewable energy has been improving and getting cheaper.

The price of coal powered electricity has trebled in 8 years. You can tell because the cost has been passed on to you and me.

And as the cost of that power source rises, the cost of alternatives become much more palatable.

There is a problem in regards to renewable electricity sources. And that is you need lots of land. More land then for a coal powered plant by far. Despite that fact, the price of renewable sources are now at a competitive rate. Coal no longer costs $40 a MWh to make as the costs for the coal and the fuel to get it to the plant has increased.  If that cost is now more at $80MWh, then that graph above suddenly puts it on par with renewable sources.

Still that land costs money and then you got to spend time building it etc and by then, what is to stop the coal industry from dramatically lowering the price? Nothing.

That’s why we need a carbon price. It means that no matter if the coal industry drop the coal price dramatically from $130 a tonne to say $50, then renewable energy is STILL competitive.

Why you say? Well one tonne of coal when burnt produces 2.6 tonnes of CO2. So if the coal industry was to slash the cost of coal itself to $50 a tonne, they also have to pay for a CO2 cost of 2.6 times what ever the price is. If the price is $25 a tonne then that increases the cost of producing coal MWh electricity by $75 taking it to $125 a tonne and putting renewable energy at a fighting chance. Without that price, then coal will continue to monopolise the world.

So why price carbon. Because burning fossil fuels creates more problems then just our climate change problems today.

Environmental impacts of coal power

Burning coal is a leading cause of smog, acid rain, global warming, and air toxics. In an average year, a typical coal plant generates:

  • 3,700,000 tons of carbon dioxide (CO2), the primary human cause of global warming–as much carbon dioxide as cutting down 161 million trees.
  • 10,000 tons of sulfur dioxide (SO2), which causes acid rain that damages forests, lakes, and buildings, and forms small airborne particles that can penetrate deep into lungs.
  • 500 tons of small airborne particles, which can cause chronic bronchitis, aggravated asthma, and premature death, as well as haze obstructing visibility.
  • 10,200 tons of nitrogen oxide (NOx), as much as would be emitted by half a million late-model cars. NOx leads to formation of ozone (smog) which inflames the lungs, burning through lung tissue making people more susceptible to respiratory illness.
  • 720 tons of carbon monoxide (CO), which causes headaches and place additional stress on people with heart disease.
  • 220 tons of hydrocarbons, volatile organic compounds (VOC), which form ozone.
  • 170 pounds of mercury, where just 1/70th of a teaspoon deposited on a 25-acre lake can make the fish unsafe to eat.
  • 225 pounds of arsenic, which will cause cancer in one out of 100 people who drink water containing 50 parts per billion.
  • 114 pounds of lead, 4 pounds of cadmium, other toxic heavy metals, and trace amounts of uranium.



Solid Waste

Waste created by a typical 500-megawatt coal plant includes more than 125,000 tons of ash and 193,000 tons of sludge from the smokestack scrubber each year. Nationally, more than 75% of this waste is disposed of in unlined, unmonitored onsite landfills and surface impoundments.

Toxic substances in the waste — including arsenic, mercury, chromium, and cadmium — can contaminate drinking water supplies and damage vital human organs and the nervous system. One study found that one out of every 100 children who drink groundwater contaminated with arsenic from coal power plant wastes were at risk of developing cancer. Ecosystems too have been damaged — sometimes severely or permanently — by the disposal of coal plant waste.

Cooling water discharge

Once the 2.2 billion gallons of water have cycled through the coal-fired power plant, they are released back into the lake, river, or ocean. This water is hotter (by up to 20-25° F) than the water that receives it. This “thermal pollution” can decrease fertility and increase heart rates in fish. Typically, power plants also add chlorine or other toxic chemicals to their cooling water to decrease algae growth. These chemicals are also discharged back into the environment.

Waste heat

Much of the heat produced from burning coal is wasted. A typical coal power plant uses only 33-35% of the coal’s heat to produce electricity. The majority of the heat is released into the atmosphere or absorbed by the cooling water.

Cost of the actual mining

Coal mining

About 60% of U.S. coal is stripped from the earth in surface mines; the rest comes from underground mines. Surface coal mining may dramatically alter the landscape. Coal companies throughout Appalachia often remove entire mountain tops to expose the coal below. The wastes are generally dumped in valleys and streams.

In West Virginia, more than 300,000 acres of hardwood forests (half the size of Rhode Island) and 1,000 miles of streams have been destroyed by this practice.

Underground mining is one of the most hazardous of occupations, killing and injuring many in accidents, and causing chronic health problems.

Coal transportation

A typical coal plant requires 40 railroad cars to supply 1.4 million tons in a year. That’s 14,600 railroad cars a year.

Railroad locomotives, which rely on diesel fuel, emit nearly 1 million tons of nitrogen oxide (NOx) and 52,000 tons of coarse and small particles in the United States. Coal dust blowing from coal trains contributes particulate matter to the air.

Coal storage

Coal burned by power plants is typically stored onsite in uncovered piles. Dust blown from coal piles irritates the lungs and often settles on nearby houses and yards. Rainfall creates runoff from coal piles. This runoff contains pollutants that can contaminate land and water.

And finally, another resource cost. Water.

A typical 500-megawatt coal-fired power plant draws about 2.2 billion gallons of water each year from nearby water bodies, such as lakes, rivers, or oceans, to create steam for turning its turbines. This is enough water to support a city of approximately 250,000 people.

When this water is drawn into the power plant, 21 million fish eggs, fish larvae, and juvenile fish may also come along with it — and that’s the average for a single species in just one year. In addition, EPA estimates that up to 1.5 million adult fish a year may become trapped against the intake structures. Many of these fish are injured or die in the process.



All that pollution affects health, land, ecosystems etc. All those costs will eventually have to be paid either in monetary costs or in the cost of lives.

But on top of all that, in the last 100 years, we have managed to be responsible for 30% of the CO2 in the atmosphere and we are continuing to spew it out and that will cause climatic changes and that will also come with a cost at lives and the more important one to our friends in the coalition parties, money.

It seems if you say the word money to a coalition person, they are more attentive then when you say general health of the population.

So in a nut shell. Putting a price on carbon allows renewable energy plants to compete with fossil fuels. Hell even if you DO NOT put a price on carbon, burning fossil fuels as I have pointed out comes at a hidden cost of lives, health, and damage to the environment.

You tell that to a climate change denier and they will mock you. They may even run the argument that smoking does not cause cancer. And the only time they will care about people’s health is when it involves their own. So to make these greedy bastards see the light, we make it a monetary issue.

A price of carbon will allow a vibrant and active renewable industry to rise and challenge the dinosaurs of the 19th century and save us money. Money that we do not have to spend cleaning up spills and contamination. Money we do not have to spend rebuilding cities devastated by the effect of the planets fury. Money we save in regards to the cost on peoples health.

If you hear one rat faced politician or radio shock jock claim that pricing carbon will have no effect on reducing emissions, tell them they are dreaming.

Pricing carbon WILL work and it WILL save money and it WILL create an environment for renewable energy source. It will protect the way we live and it will protect our castle; this planet.

This fragile rock we call home.

All you have to do is step back a little and you can see what is at stake here.

Cost benefit analyse that.

A. Ghebranious         2011     (All Rights Reserved)

  1. Jennifer Baratta permalink

    Here we go!

  2. In the Australian context, the cost of freighting coal from mine to power station is 0. We generally build our power stations next to coal mines.

    The raising price of thermal coal isn’t primarily driven by coal supply & demand. It’s a factor, but the primary driver of coal prices is the price of oil. Oil is our most flexible energy source and thus our most valuable, energy’s gold standard. The value of all other energy is set relative to the oil price. Because of peak oil, the value of all energy is only going in one direction, and that is up. By the way, peak oil appears to have happened in 2005.

    Renewable energy takes land, but the cost of land isn’t the main cost. The main cost is the capital cost of the infrastructure needed to catch & concentrate the dilute energy source. Thus the interest rate environment is critical to renewables uptake, the lower interest rates are the better.

    Fossil fuels are pre-concentrated by nature, they are in this way, a free-kick. Because of fossil fuel are the main driver of global warming, their contained use is madness. The current proposal is unwieldy, a far better approach is to levy fossil fuels directly at the point of production, at the mine gate and well head!

  3. mick wilson permalink

    Just like the alco pops tax reduced the consumption of hard spirits!!!!
    Give me a break!

    You obviously aren’t raising a family, so don’t have a clue about how hard real families are already doing it with their electricity costs already.

    You probably won’t believe this, but most people who you would call deniers ( or radical or grey bogans ) believe just like you that we should try to leave the planet better than we left it. Unfortunately, those on the left would rather have a cultural war than to find that place in the middle that is a starting place that we can all agree on.

    After all if the extreem left found they agreed with something the majority believed in, what would that mean….armageddon coming???

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