Coal news and updates

The Best Thing for Coal Country: A Coal Tax?

The best way to shore-up West Virginia's coal country – anemic for years, but now positively swooning from plummeting demand – might be, of all things, a new federal tax on coal.

Strictly speaking, the fee wouldn't be on coal but on the heat-trapping carbon emissions generated by burning coal and other fossil fuels. And it's an idea that isn't new. Environmentalists like a carbon price because it would encourage electric utilities to switch from coal to cleaner sources of energy, like natural gas, solar and wind. Some conservatives and many economists like it because it would fix a distortion in the market, accounting for costs not included in coal's market price – such as health problems from emissions like soot or the broader consequences of global warming.

But the latest analysis from the World Resources Institute – a research organization that’s advocated for action on climate change – calls for directing some of the revenue from a carbon tax back into coal communities, which have struggled to adapt as mines have closed.

"Just a tiny percentage of the revenues that we know a carbon price would produce would be a multi-billion-dollar investment package in coal regions," said Noah Kaufman, an economist for WRI's U.S. Climate Initiative who authored the report. "Those are resources they desperately need and that they just aren't getting."

Coal production this year was on track to plunge to its lowest level since the 1970s. Employment in the sector has dropped by more than a third since 2011, putting more than 8,000 workers out of a job, according to the U.S. Bureau of Labor Statistics and the Annual Economic Outlook prepared by West Virginia University.

That's strained social services, not to mention investment in new infrastructure and economic development, Kaufman says. The state's unemployment rate ranks the second-highest in the country, and recent bankruptcies of some of the world's largest mining firms threaten to make the situation even worse, imperiling workers' pensions and health benefits.

"People are being impacted here," Charles Patton, president of Appalachian Power, said at aconference in Morgantown last week on the future of West Virginia's economy, where WRI also presented its findings.

A price on carbon would raise $100 billion to $200 billion a year. Some groups, such as the Partnership for Responsible Growth, call for making the tax "revenue neutral," such as by putting half the proceeds toward reducing the corporate tax rate, and the other half toward lowering tax bills for low- and middle-income Americans.

Kaufman, by contrast, contends a portion of the income could guarantee miners' health and retirement benefits or go toward redeveloping land near abandoned mines, investing in advanced energy technologies or transitioning the state's economy."We're witness now to the collapse of an economy," Joyce McConnell, provost at WVU, said at Friday's conference.

Source: Usnews