If it’s all too hard to work out, then the simple answer is for coal to be required to fully inrternalise all of its impacts — restoring places from which they have harvested coal to a condition comparable to the condition they were in prior to harvest. Ensure that all mining coal are pretected from inhalation of particulate and leave the workplace fully decontaminated. Let the coal be transported in such a way as to avoid spillage. Let all potentially harmful emissions from thermal plants be collected and sequestered until they are innocuous.

If any part of this cannot be done, then let the damage arising from those parts of the cycle be the subject of costs borne by the coal using companies involved.

Then let them compete with other energy sources doing the same thing.

It’s quite simple really.

My main point is that coal has to have all externalities removed; turned into internal costs. I strongly suspect that will be more than enough to see that
(1) energy efficiency
(2) geothermal (where available)
(3) Combined cycle natgas with carbon tax or offset
(4) nearby wind (where available with hydro backup)
(5) nuclear
will all be less expensive than coal with costs running higher further down the list.

I think this straying a little far and wide as I have no desire to defend coal. I don’t hate coal, the producers or the users, which in reality is us, as were are the ones turning on the lights.

Are there externalities in the use of coal? It appears there are obviously. Are they properly priced? I’m not at all certain if such an exercise is easily done as externalities despite what people often say are really complex to figure out..

Having said that if there is going to be government intervention in the energy markets I would much prefer to see the removal of all subsidies, stop the hobbling of nuclear energy and enact a point-in-time objective where we’re totally emissions free getting there by stages. That way all the technologies can compete on a level playing field.

I would also tend to agree with Peter that after decades of emotional abuse governments have allowed to be perpetrated against nuclear energy it is incumbent on them to find ways to revitalize it. They helped almost wreck this technology, so they owe it something at the beginning such as insurance guarantees etc while the market develops over a short period of time..

Thanks Barry. Yes I think it would be a global figure.

So you think there has been no benefit from energy production?

You want to talk about something else without standing by your implicit claim that there are no unidentified subsidies in coal?

Why would that be? Peter Lang, whom you claim to admire, affirms these externalities and that internalising them would be incompatible with viable coal production. Pending a substantive response on this I’m going to claim that your attempt to change the subject reflects your agreement that my discussion above refuted your claim.

Integrity would imply admitting this explicitly.

As to your change of subject … of course there have been benefits associated with fossil energy production. There have also been costs and those are mounting while benefits are static. To date, net benefit has been positive, but we are now at a stage when the relative net benefits of reducing the fossil intensity of industry and human activity more generally would be very significant and perhaps the difference between a roiling series of disasters for humans, followed by a catastrophic period of decline and the preservation and steady ascent of civilised life.

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Honestly I have no idea where $500 billion comes from as it would represent 50% of Australia’s GDP per year, so the figure seems a little far fetched to me.

I’m heavily in the Peter Lang camp. He just great. We should be very careful how we dismantle our current energy production as we head to nuclear plants and we should strive towards making nuclear cheaper than coal.

So you think there has been no benefit from energy production?

Simply saying the concept of “externalities is abused is argumentum ad nihilo. It tells us nothing about whether externalities are a form of subsidy in any particular case. For coal, we need to ask tow things:

1. Does coal use become more or less economically feasible as a consequence of the externalities attached to its use?

If the answer is yes, the the next question is

2. Do these externalities impose costs on others (opportunity or tangible)?

If the answer is again yes, then we have a cost shift from one party to another. If the other party is the commons, we have a classic Tragedy of the Commons scenario — i.e an unidentified subsidy. Some economists call this a collective action problem.

Just yesterday for example, I heard that people in NY were given the right to keep bees. Hitherto, the risk to the public from these “wild animals” was considered to great a risk to impose on the public as a whole, since people could die of bee-stings. In short, this externality had been considered too great a public subsidy to hand to people wanting to produce honey. Today that view has been reversed and so the subsidy will now be paid out of the increased risk imposed on members of the public of being stung by bees. Presumably, if someone is stung and suffers a quantifiable harm traceable to a bee’s keeper, he or she (or the estate) can sue. Hopefully, there will be an insurance fee so that anyone stung by a NY bee can recover damages. See the point?

On your reading, the PC takes it as self-evident that people should suffer poorer health while the coal fuel cycle operates and a fall in the value of ecosystem services for all eternity in exchange for the value of the electricity now. We could monetise this, but the real question is that if this externality were internalised i.e if all of the waste in the coal fuel cycle were internalised what implications would this have for coal fired electricity costs?

Given that nobody in the business even toys with this idea, one may assume that the figure is huge. Indeed, even the rather lesser challenge of CC&S is acknowledged to not be feasible until at least 2032, if ever. If you look at Lang’s contributions here, you will note the outrage with which he greets suggestions that coal be held to the same standard as nuclear — he rejects this as simply unthinkable — and he is right on that score.

So the real question is why you (and if you’re right, the PC) think that coal fired power people ought to be able to poison the populace and destroy ecosystem services for free so we can have marginally “cheaper” power? Why this huge subsidy from the public?

“Storage’ is a problem in terms of where the batteries are going to be stored and if there is room to store them in the gas stations we have. My concern with ideas like “Better Place” is that it may be very labor intensive adding to the costs of fuel

The “gas” stations we have already store large volumes of hazardous materials. Presumably, better place will negotiate suitable arrangements or build their own stations. They have done this in a number of places already. That’s a business problem for them to solve in each market. I’m going to suppose that any designer of PEVs would arrange matters so as to facilitate rapid swapping of the units.

I tend to to speculate that plug in won’t be the way to go, but hydrogen will be …

Best to stay away from asking the questions you asked of batteries for hydrogen.

The stuff embrittles metals, has low energy density, tends to escape gaps in pipes, and there is no mass production hydrogen vehicle in existence. The infrastructure needed to roll this out would occupy more than the space of conventional liquid fuels, LTFCs require noble metals. Hydrogen will never underpin a significant proportion of vehicle miles.

“Externalities” is the most abused term in economics.There are positive externaities too by the way, they aren’t all negative. The productivity commission is perhaps one of the most respected groups in the country. Dismissing their arguments should illicit a little more than a laugh.

“Storage’ is a problem in terms of where the batteries are going to be stored and if there is room to store them in the gas stations we have. My concern with ideas like “Better Place” is that it may be very labor intensive adding to the costs of fuel.

I tend to to speculate that plug in won’t be the way to go, but hydrogen will be and as an interim we’ll see hybrids.

Check out “externalities” as a concept in this discussion.

Storage is one problem

How so? Please outline the storage problem you see.

The battery replacement issue isn’t as easy as you think. Storage is one problem.

Running power cords was a little tongue in cheek, however it does point to some serious structural issues with plug-ins as the cost of electrifying street level availability would be quite expensive, vulnerable and pretty dangerous in case of accidents.

According to a productivity commission report coal and plants had around $500 million of identifiable subsidies …

Laughing …

It is the unidentifiable subsidies that are the principal issue …

It’s unrealistic to expect the owners to be running power cords from the 15 storey apartment down to street level

Indeed, but of course the proposal by companies such as Better Place is for rapid battery exchange points. Some people might be able to recharge at their workplaces or in commuter or shopping centre carparks.

You need to be careful what you mean by subsidies. Coal and coal fired plants is not really subsidized that much at all. According to a productivity commission report coal and plants had around $500 million of identifiable subsidies, which in the scheme of things hardly means it would be unprofitable if it stopped. The subsidies offered the car makers is around $6 billion.

terje: Plug ins will enter the market, however I don’t see a big future for them unless battery replacement is as easy as filling a tank. It’s okay for people that have garages and car ports but a good slab of the world’s cars are housed outside. It’s unrealistic to expect the owners to be running power cords from the 15 storey apartment down to street level.

Yes, there could be power outlets at street level with individual identifiers. However the infrastructure costs and the problems that would create is pretty big.

Hydrogen engines are what I think we will end up with.

Now that all that has been internalized, the price of coal will be considerably larger, especially if CCS is required. I rather suspect that then coal will be priced out of the market in favor of cleaner means of producing heat and elecricity. Then, I opine, a Pigovian tax on carbon is unlikely to be required.

But yes, Virginia, the cost of electricity will go up; learn energy efficiency.