A Final Blow on the War on Coal

A Final Blow on the War on Coal

September 30, 2013
Originally published in Human Events

A funny thing happened on the way to the coal plant the other day. But it wasn’t ha-ha funny. In fact, it was tragic – and on multiple levels. Tragic in that the federal government is overreaching yet again. Tragic in that it is making a major policy change based on questionable assumptions – again. And most tragic of all in that it is openly destroying an industry for no other reason than some people in Washington do not like it.

On Sept. 20, the Environmental Protection Agency issued a new carbon dioxide emission standard that analysts say will preclude the construction of new coal-fired power plants. This is a bold move, even from the administration that brought us Obamacare and Dodd-Frank. Coal power has long been Americans’ most affordable source of electricity, mainly because we have so much of it here at home.

As much of the nation continues to struggle with significant unemployment, higher electricity bills are the last Christmas present anyone needs. Yet, President Obama seems more concerned about the demands of his environmentalist supporters, who will implement their anti-carbon agenda at any cost.

I have to give the man credit for finally acknowledging something that my organization, the Competitive Enterprise Institute, has been saying for years: Yes, Virginia, there is a war on coal. And just like other governmental regulatory wars – on tobacco, genetically modified crops, even lawn darts – it is nothing more than the use of power to force individuals and businesses to change behaviors that some in government find offensive.

The EPA’s proposed emissions standard would, for the first time, place uniform national limits on the amount of carbon dioxide coal and natural gas power plants will be allowed to emit in the future. It would mandate use of carbon capture and sequestration technology that is not even commercially available – and no doubt will be extremely expensive even if it does become available in future decades. Think about that for a second. The federal government has told an industry that to continue operating it must start using technology that essentially does not exist.

You might say, “Well, we do want clean air, right?” Sure, everyone wants clean air, just like everyone wants cleaner sidewalks, safer streets and cheaper medicine. But when the government institutes sweeping regulation purportedly to advance any one of these goals, we must ask: Does this regulation actually do what it’s supposed to do, and at what cost? Not even the wiliest Washington bureaucrat can mandate a free lunch into existence.

There is much about this new emissions standard that is upsetting.

First, its very foundation is questionable. The EPA’s proposed performance standards, which require carbon capture and storage, are largely modeled on a facility in Mississippi that is still under construction and not expected to begin operation until next spring and could not have been built without government money to begin with. In other words, the heavily subsidized facility that is supposed to theoretically demonstrate a plant’s appropriate performance level does not even exist yet!

Second, the EPA’s justification for the rule depends on a concept called the “social cost” of carbon – a highly subjective estimate of carbon dioxide emissions’ effect on humans and the environment.

Measuring it relies on assumptions about climate sensitivity and other complex issues – for example, how much an incremental increase in carbon will affect warming, how warming will affect sea levels, how much sea level changes will affect agriculture and how people may adapt to any changes. These issues are in no way settled. Yet, by feeding certain assumptions into a model and tweaking the parameters, government officials claim to be able to “measure” a social cost of carbon well into the future that justifies significant emissions regulation. Essentially, this would involve bureaucrats putting models in place that effectively give them the results they want.

Here’s the bottom line. Industries come and go all the time. Companies go bankrupt and the towns where they are located go quiet when market demand shifts to make a once-valued product obsolete. It’s a tough thing when people lose their livelihoods after an industry falls out of favor with consumers. But when industries die naturally through the ever-regenerating processes of creative destruction and competition, that’s a consequence of living in a free society – and essential for innovation and progress.

Yet, when the federal government decides to use the law to kill an industry, that’s an entirely different animal. It’s not just the thousands of people who work in the coal industry who will suffer – it’s all of us. Politicians and bureaucrats have an atrocious record in their efforts to pick industrial winners and losers. Giving them more power to decide which industries live or die is the surest way of bringing innovation and progress to a screeching halt.