Architecture 2030 recently ran a full page ad in The New Yorker magazine, asking "Think You’re Making a Difference? Think Again." They note that "There are 151 new conventional coal-fired power plants in various stages of development in the US today," and go on to compare the beneficial impact of major conservation initiatives against the negative impact of one coal plant:
Home Depot is funding the planting of 300,000 trees in cities across the US to help absorb carbon dioxide (CO2) emissions... The CO2 emissions from only one medium-sized (500 MW) coal-fired power plant, in just 10 days of operation, will negate this entire effort.
Wal-Mart is investing a half billion dollars to reduce the energy consumption and CO2 emissions of their existing buildings by 20% over the next seven years. If every Wal-Mart Supercenter met this target… The CO2 emissions from only one medium-sized coal-fired power plant, in just one month of operation each year, would negate this entire effort.
California passed legislation to cut CO2 emissions in new cars by 25% and in SUVs by 18%, starting in 2009. If every car and SUV sold in California in 2009 met this standard… The CO2 emissions from only one medium-sized coal-fired power plant, in just eight months of operation each year, would negate this entire effort.
Their conclusion: No more coal.
Today, buildings use 76% of all the energy produced at coal plants. By implementing The 2030 Challenge to reduce building energy use by a minimum of 50%, we negate the need for new coal plants.
My conclusion: No more new coal, sure. How about no more old coal either? As I wrote earlier this year in Big Deal for Less Coal:
I've been thinking a lot about coal lately, musing about the financial strategies that would enable shutting down and writing off the entire industry. Why not buy out owners, employees and communities -- and take the financial hit now, rather than over a century or two of continued subsidies and escalating environmental and climate damage.
Estimates of the global subsidy to the coal industry range from tens to hundreds of billions of dollars per year. (See Lester Brown, Herman Scheer, Green Scissors, and UIC for a few examples.) The market capitalization of the 25 largest companies is $52.8 billion, their annual revenues about $28.5 billion. Which is a better investment? Continuing to pour major subsidies (which according to some analysts may exceed the industry's revenues) into to an industry with massive environmental impacts? Or using that budget to acquire, shut down and write off the industry; to pay decommissioning and cleanup costs; to provide transition investment and training to affected communities; and to invest in the renewable fuels and energy sources to fill the gap?
This would be a fascinating fall project for a bunch of MBA students. My bet is that this scenario generates an interesting ROI even without accounting for environmental and health costs, and a very attractive one with those included. Anyone interested in running the analysis?
As for the arguments that modern society couldn't survive without coal, German parliamentarian Herman Scheer notes that "we are faced with a green washing of black energies."
These attempts use existing mental barriers in peoples’ minds against Renewable Energy: Renewable Energies do not have enough potential to completely replace nuclear and fossil energies, their increased introduction will be too expensive and will require unaffordable subsidies, Renewable Energies technologies will need a long time to be fully operational.
These arguments are wrong.
"We should not wait for international treaties," Herr Scheer advises.
Experience gained from international governmental conferences over the last 35 years shows that these events always follow the hidden motto: “Talk globally, postpone nationally”. Their participants always have to reach a consensus. But an unbridgeable gap exists between consensus and acceleration. In history, no example of a breakthrough of a new technology can be found which has been promoted by an international treaty. The common rule is: be faster than others, because the speediest will have most opportunities.
So, anyone interested in that "shut down the coal industry" scenario? I'm easy: I'll take a team of MBA students or a modest contract from a smart investment firm.
But let's run those numbers!
It's an interesting idea, but to take a big slice out of the energy pie so suddenly could cause such a massive disruption that any bold moves in the future would be avoided.
There's probably some sort of easier solution here where the government could sponsor a coal phase-out project that provides funds for sustainable power development in return for shutting down coal production.
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No reason it has to be "suddenly," Nicholas. It would of course have to be phased in, both to mitigate to potential impacts and because it would take considerable time to plan the details of such a large shift. But that's no reason not to examine the idea, and the sooner the better, since the costs of delay - both environmentally and financially - are large.
The scenario you propose is interesting. Coal mining in all nations is beginnig to hit majors snags. The recently released reports from Germany, China and the U.S. show that coal reserves are lower than expected, ranging from 20-30%. Also, the energy content of the coal that will be mined is much lower than past coal extraction. More coal will need to be burned in order to get the same Wattage out. I think that renewable energy is already less expensive than fossil energy (take out the subsidies for both and renewables still comes out on top).
The idea of running the numbers is good, but as Scheer himself states in his book, it is all about social potential for green energy. We haven't tapped it yet and it needs to be sold as a growth business opportunity as well as an energy security issue.
Smart money is already on renewables, but fossil still has a death grip that will only be released with small jolts of success. Hopefully, if communities start buying out coal plants and replace them with renewables, then a ripple will become a tidal-wave. My guess is that the state of New York is ripe (politically and socially) for this sort of idea.
This is an exciting idea, Gil. I'm a big fan of pollution taxes to achieve the same thing (with an equal drop in business and income taxes), but I can see how this could work. This is more doable at the state level first. Are there many coal plants on the west coast? That seems like an obvious place to start. I'll look into Virginia.
Here are the coal plants in Virginia, though I know of a few that are used for heat elsewhere (such as the University of Virginia). Some of these I'm sure are ripe to be decommissioned anyway. The oldest plant at Chesterfield was built in 1952.
How to dethrone King Coal?
I think the answer lies in solar panels reaching grid parity. And new and innovative financial structures that will put energy ownership in the hands of people and not of corporations. Imagine what it would do to the local and national economy if money that is currently funneled up to corporations and sent oversees to despotic regimes, were instead funneled back into local business? What would that mean for employment? Poverty rates? Income distribution? Quality of life?
Also, look into the green jobs work of the Ella Baker Center in Oakland. The green economy should pull people out of poverty while ensuring a healthy climate.
So, back to coal. We have PLENTY of energy generating capacity right now. Our biggest crunch comes during PEAK demand times. Solar power provides more energy during those peak hours, so it is the perfect answer to our energy needs. We do not need more coal to address energy needs, we need less of it to address climate needs.
Lets talk about solar panel economics for a moment. With current production prices, rebate levels, and depending somewhat on how much energy you are using per month (determining your incremental energy rate, on a 20 year period:
solar panels return the equivalent of 11% annual rate of return
this is the historic average of the stock market
New technologies currently gearing up for production in solar panels will bring the price down by half. This means that even if subsidies disappear solar panels will still enjoy this rate.
Imagine if we invest the money we would be spending on coal into solar panels, people would benefit by owning their own energy production, and after paying it off would have that much more disposable income
The real trick lies in new and interesting financial structures to make the market proliferation happen. There are people working on them right now. They are the next dotcom explosion, the next google founders. And they will change the world in the climate's 11th hour.