This article first appeared in Spark, and is reprinted here with their permission. It's somewhat long, and it's got numbers and graphs. It helps if you imagine Scarlett Johansson reading it.
When it comes to power generation, coal isn't cheap. Both power plant and fuel costs are up by nearly 300%, and projected to rise farther1. Even before factoring in the risks of future greenhouse gas legislation, this has conspired to make a bet on coal-fired central station power equivalent to a bet on massive retail power price increases. Increasingly, this is a bet that neither equity nor debt providers are willing to take.
And yet we continue to operate under the assumption that coal is cheap -- to the extent that we have largely framed our greenhouse gas policy conversation as a tradeoff between environmental stewardship and the cheap coal fantasy.
On balance, this is good news, because it means that the perceived conflict at the heart of our current climate change debate is false. We need not quibble about whether or not we can afford to address global warming; indeed, we can lower greenhouse gases and grow the economy. But first, we have to get beyond coal.
The Electric Sector's Role in Greenhouse Gas Emissions
In the United States, coal is primarily a power plant fuel, and the electricity sector is our single biggest source of greenhouse gas (GHG) emissions. As a result, any discussion of greenhouse gas reduction must confront coal-based electricity. Figure 1 shows total US greenhouse gas emissions by sector, and Figure 2 shows how the electric sector has steadily increased its share thereof.
Figure 1: 2005 US Greenhouse Gas Emissions, By Source2