National Academy blockbuster: Coal’s huge hidden costs

October 19, 2009 by Ken Ward Jr.


Coal industry lobbyists and coal-state politicians like to remind us that coal is a relatively cheap source of energy.

But in a major new report out today, the National Academy of Sciences details some of the huge “hidden costs” of coal: More than $62 billion a year in “external damages” — that is, premature deaths from air pollution.

A National Academy news release is available here and the report itself here.

Those coal costs are part of the $120 billion in “hidden costs” that the academy’s National Research Council documented in its report, “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use.”

What are they talking about? The press release explains:

Requested by Congress, the report assesses what economists call external effects caused by various energy sources over their entire life cycle — for example, not only the pollution generated when gasoline is used to run a car but also the pollution created by extracting and refining oil and transporting fuel to gas stations.  Because these effects are not reflected in energy prices, government, businesses and consumers may not realize the full impact of their choices.  When such market failures occur, a case can be made for government interventions — such as regulations, taxes or tradable permits — to address these external costs, the report says. 

The study focused on trying to put a dollar amount of the health damages associated with the emissions of major air pollutants — sulfur dioxide, nitrogen oxides, ozone and particulate matter — from various aspects of the nation’s energy production and use.

During a conference call with reporters, the study team chairman, Carnegie Mellon University President Jared L. Cohon, noted that in the electrical sector, coal provides nearly half of the nation’s electricity — but accounted for nearly all of that sector’s hidden costs.

In 2005, the total annual “external damages” from these air pollutant created by burning coal at 406 power plants were about $62 billion. That amounts to about 3.2 cents for every kilowatt-hour of energy produced. For comparison purposes, the average U.S. cost of electricity for consumers is 12 cents per kilowatt-hour.  The National Research Council report added:

… The differences among plants were wide — the 5th and 95th percentiles of the distribution were $8.7 million and $575 million, respectively. After ranking all of the plants according to their damages, we found that the 50 percent of plants with the lowest damages together produced 25 percent of the net generation of electricity but accounted for only 12 percent of the damages. On the other hand, the 10 percent of plants with the highest damages, which also produced 25 percent of net generation, accounted for 43 percent of the damages.

What about other fuels?

The report press release says:

Burning natural gas generated far less damage than coal, both overall and per kilowatt-hour of electricity generated.


The life-cycle damages of wind power, which produces just over 1 percent of U.S. electricity but has large growth potential, are small compared with those from coal and natural gas.

It’s important to note that the report found that coal’s hidden costs should go down significantly, to about 1.7 cents per kilowatt hour, by 2030, in large part because of reductions in air pollution as plants add more emissions reductions equipment.

But, the study did not try to provide new estimates of the hidden costs related to coal’s greenhouse gas emissions. Instead, it simply cited previous projections which put those costs at ranging between 01. cents to 10 cents per kilowatt-hour.

And as study team member Maureen L. Cropper of the University of Maryland pointed out, this new report did not attempt to examine all sorts of other “up-stream” impacts of coal, such as water pollution or damage from mountaintop removal coal-mining:

We didn’t really quantify or monetize those anywhere. So, for example, if you take the waste from a scrubber and dump it in the Monongahela River, we didn’t include that.

24 Responses to “National Academy blockbuster: Coal’s huge hidden costs”

  1. Jendenuvaden says:

    It’s a crying shame that the authors of this report didn’t try to quantify or examine the “up-stream” impacts of coal- how much of a dollar amount can you put on dead lands that leach heavy metal contaminants, the destruction of highland watersheds that could provide drinking water for thousands of generations to come, or irreplaceable climax forests? The entire US GDP?

    They probably would have come to the same conclusion many of us who live in the mountains already have- those mountains, valleys and streams are Priceless.

  2. Vernon says:

    The “upstream impacts” (interesting choice of words) didn’t include the really significant costs of water pollution, MTR, etc. So it’s important to realize that the cost of killing Dunkard Creek and potentially dozens more WV streams does not show up on the electric bill, but will probably be born by the taxpayer. The health care costs and loss of life in communities like Prenter may never be fully tallied, but the citizens suffering the most, the taxpayers, and insured people’s premiums will pay for that, not always with currency, but often in less tangible ways. Huge disasters and the associated cleanup, such as the TVA billion-gallon ash disaster, will be paid for by the property owners and ratepayers, but even then never fully compensated. The Alabama community where that ash is being taken will now pay with their health and quality of life. There’s certainly nothing cheap about coal.

  3. rhmooney3 says:


    All of this is known — stating the oblivous.

    Why bother? What’s the purpose?

    There are a lot of subsidies, especially so for agrobusinessses.

    For example:
    Why Congress Should Repeal Sugar Subsidy

    A Sweet Deal for Big Sugar’s Daddies

    Sweet deal why are these men smiling ?
    The reason is in your sugar bowl

    Sugar Buyout Only Adds to Complexity
    of Everglades Restoration

    A Dance of Environment and Economics in the Everglades


    Like many Hiaasen novels, the book’s plot is set against a backdrop of a particular environmental crime or corruption issue that angers the author. In this case, it is the plutocracy of sugar growers in Florida, and the exorbitant subsidies regularly granted to them by the U.S. Congress.

    Strip Tease was a New York Times bestseller in 1993.


    By Michael Grunwald
    The Washington Post
    June 25, 2002

    First Carl Hiaasen skewered greedy sugar barons in such novels as “Strip Tease.” Then Marge led a campaign against the villainous Mother-Loving Sugar Corp. on “The Simpsons.” But now Big Sugar is in really big trouble on the pop culture front. On a recent episode of “The West Wing,” President Bartlett’s political aides floated a $7.8 billion plan to save the Everglades. (more)

  4. Clem Guttata says:

    rhmooney3 — Can you say a little more about what point you’re trying to make? I don’t get how sugar subsidies relate.

    I think the study authors are trying to put firm numbers of negative externalities — the hidden negative costs of using different sources of fuel. If so, the equivalent for sugar would something along the lines of increased cases of diabetes and other obesity-related illnesses.

    I haven’t read the study yet, but from what Ken describes it sounds important for the following reason:

    Even though the negative impacts of coal-fired electricity generation are largely known, they have not been systematically quantified in relationship to other sources of fuel.

    The findings are important because Congress is considering huge bets on different fuel sources in current energy/climate legislation. If coal-fired electricity is actually 25% more expensive than it otherwise appears even *before* carbon capture, that makes the economics even less desirable to continue investing in coal infrastructure.

    Many people have been making this argument for a while, having these hard numbers from the National Academy of Sciences makes it much harder to ignore.

  5. Red Desert says:

    Somewhat related in the “big picture’ sense and we have discussed his ideas here before:

    Vaclav Smil interview today on NYTimes Dot Earth blog:

  6. The references to sugar and other “subsidies” totally miss the point. The issue addressed by the NAS study is external “costs.” i.e., losses absorbed by others, not funds provided to coal. The losses incurred as a result of coal in this state include the fact that West Virginia leads the country in deaths per 100K attributable to particulate matter emitted from coal-fired electric plants. The 2nd thru 6th state rankings in deaths from PM per 100K are KY, OH, PA, TN, IND. What do these states have in common? They constitute the footprint of American Electric Power, the largest purchase of coal on the North American land mass. This is not a “subsidy”; it’s negligent homicide.

  7. Matthew Cook says:

    Hard to get a total picture of the report since I won’t pay $40 to get it, but the release is interesting in noting that 10% of coal plants caused 40% of pollution. I assume this means for 90% of plants impacts are in the range of $0.018/kwh which I think means even adjusting for this value coal is probably cost competitive. It would seem to me that this suggests the need to modernize the coal fleet replacing current 30-35% efficient boilers with state of the art 47-50% super-ultra-critical reactors. Think about it – construction jobs- steel – concrete – and american coal all while reducing greenhouse gases and perfecting a technology that could be marketed to the Chinese to help them with their environmental record. Sounds like a stimulus package I could get behind.

  8. AllenRJohnson says:

    This extraordinary report is only the tip of the externalization of costs, as other bloggers have noted. For example, studies show the cost that airborne mercury contamination into the food supply (coal being the major culprit) has on dunning IQs of babies and the resultant social and economic loss.
    But even more so is the moral and ethical implications. Simply speaking, harmful pollution to innocents is morally intolerable. Thus our society has laws against second hand tobacco smoke, etc. Clean air and water are inalienable rights that trump ANY and ALL economic issue like lower electricity bills.

  9. rhmooney3 says:

    Re: Sugar subsidies

    Getting beyond just words is beyond difficult — just because something is totally wrong and needs to be changed doesn’t matter — sugar ‘welfare’ subsidies is a prime example how a very small group can have great power to prevent change.

    If there is anyone who has not read “The Jungle,” they need to do so.
    There was never the least attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white–it would be dosed with borax and glycerine, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had tramped and spit uncounted billions of consumption germs. There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one–there were things that went into the sausage in comparison with which a poisoned rat was a tidbit. There was no place for the men to wash their hands before they ate their dinner, and so they made a practice of washing them in the water that was to be ladled into the sausage.


    October 19, 2009
    Michigan limits mercury from coal-fired plants

    October 16, 2009
    NPR’s Useful, But Flawed, Series on Natural Gas
    The three-part series, which aired Sept. 22-24 on Morning Edition, gave an overview of how technology has dramatically altered the natural gas industry, explained the industry’s structure, and described how unsuccessful it had been in getting breaks from Congress in the current climate change legislation.

    But the series had a flaw.

    The reports did not thoroughly address environmental and public health concerns about extracting natural gas using a technique called hydraulic fracturing or “fracking.” This involves drilling down a mile below the surface, then shooting a million gallons of water, sand and chemicals to break up the shale and release the gas.

  10. rhmooney3 says:

    Matthew Cook:

    The report is free online — getting a printed copy mailed to you is what costs.

    (Someone could make money doing Cliff Notes on government reports — 90% fluff content.)

  11. […] Blogs @ The Charleston Gazette – » National Academy blockbuster: Coal’s huge hidden costs – view page – cached Coal industry lobbyists and coal-state politicians like to remind us that coal is a relatively cheap source of energy. — From the page […]

  12. Casey says:

    Matt, excellent points as usual. Plus with on-going continuous improvement with pollution control the report states a very relevant fact: “It’s important to note that the report found that coal’s hidden costs should go down significantly, to about 1.7 cents per kilowatt hour, by 2030, in large part because of reductions in air pollution as plants add more emissions reductions equipment.”

    The WSJ reported yesterday on carbon capture technology. One method uses purified oxygen with burning coal for easier capture and little loss of plant efficiency and has been demonstrated in small scale pilots. It is to be tried in a one-megawatt plant next year.

  13. rhmooney3 says:


    Coal continues to take a beating. Holding your breath for a break through technology is ill advised.

    Better plan to hunker down and hope to be among the survivors.

    October 19, 2009 (Excerpt)
    According to figures posted by the United States Energy Information Administration, US power consumption dropped for the twelfth consecutive month. . . . When broken down by sector, the decline in coal electricity approaches 13% for the 12 month period.

    October 20, 2009
    Caterpillar said Tuesday its third-quarter profit tumbled 53 percent as customers bought fewer of its bulldozers and other yellow-and-black machines. . . . Sales in the third quarter slid 44 percent to $7.30 billion.

    October 19, 2009
    Five Technologies That Could Change Everything
    One promising technique burns coal and purified oxygen in the form of a metal oxide, rather than air; this produces an easier-to-capture concentrated stream of CO2 with little loss of plant efficiency. The technology has been demonstrated in small-scale pilots, and will be tried in a one-megawatt test plant next year. But it might not be ready for commercial use until 2020.

    Using purified oxygen, rather than air, to burn coal results in a
    CO2-rich flue gas that can be upgraded to the quality
    necessary for geological storage employing technologies
    commonly used to purify CO2 for industrial use.


    August 14, 2009
    HOUSTON (Dow Jones)–Billionaire energy investor T. Boone Pickens’s hedge fund BP Capital liquidated its positions in coal-producing companies as well some oilfield service companies, and took larger stakes in oil and natural gas producers. . . . The fund also eliminated its positions in coal producers Alpha Natural Resources Inc. (ANR), Consol Energy Inc. (CNX), Massey Energy Corp (MEE). It also sold off its positions in two companies that provide project management services to the energy industry, Fluor Corp. (FLR) and Foster Wheeler (FWLT).

  14. Casey says:

    RH Mooney:
    Of course Cat sales and coal sales are down since we just went through a major recession. Both will pick back up with economic recovery. With the deficit at 10% of GDP and growing, and the debt equal to GDP, government spending and a massive transfer of wealth, along with the risk of inflation, certainly will stifle the recovery. T. Boone was able to sell his stake only because someone else purchased his shares.

    I won’t hold my breath on technology but I, unlike the doomsayers, will put my faith in it for answering our problems. There are developments with storage of renewable power that may prove feasible to solve the continuous power issue but without that, coal and nuclear are needed.

  15. rhmooney3 says:


    “…since we just went through a major recession. Both will pick back up with economic recovery.”

    “Went through” seems to indicate it’s sunny again.

    I don’t thinks so…nor does Uncle Joe: (10/19/09, 30 seconds)

    I do fully agree that things are get better for Wall Street, but I don’t live there.

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  17. Red Desert says:


    Right now it takes 15% of a plant s output just to make the O2 for that method of CCS. Then you still have to strip out the CO2, compress it and pump it somewhere.

    Mathew Cook. I’m no fan of coal and I’m particularly against MTR, but you are right. If we are going to burn coal we absolutely have to modernize the coal fleet. I say go beyond super critical or IGCC (current state of the art) and develop plants above 50% threshold. In my opinion, this is a much wiser investment than CCS. BTW, Ken cited a very interesting Reuters article a while back on coal-based fuel cell research. 70% efficient. Can be cycled on and off (a problem for thermal coal plants.) That would be very competitive with natural gas.

    Of course if we cut our need for coal by burning and using it more efficiently, it means less mining.

    Coal has lots of problems–there is the mining, the post-combustion waste and water issues, all in addition to the air pollution issues. It’s a dirty fuel. It’s expensive to solve all those problems.

    One thing I would stress. We can gain tremendous amount by investing in efficiency. It is quite a bit cheaper than the new coal plants.

  18. rhmooney3 says:

    Red Desert,


    Keep in mind that generating more electricity (and buring more coal) makes businesses money while conserving electricity makes businesses lose money.

    Our electric and water utilities are rewarded for being inefficient.
    America operates a fleet of about 10,000 power plants. The average thermal efficiency is around 33%. Efficiency has not changed much since 1960 because of slow turnover of the capital stock and the inherent inefficiency of central power generation that cannot recycle heat. Power plants are generally long-lived investments; the majority of the existing capacity is 30 or more years old.
    America operates about 157,000 miles of high voltage (>230kV) electric transmission lines. While electricity demand increased by about 25% since 1990, construction of transmission facilities decreased about 30%. In fact, annual investment in new transmission facilities has declined over the last 25 years. The result is grid congestion, which can mean higher electricity costs because customers cannot get access to lower-cost electricity supplies, and because of higher line losses. Transmission and distribution losses are related to how heavily the system is loaded. U.S.-wide transmission and distribution losses were about 5% in 1970, and grew to 9.5% in 2001, due to heavier utilization and more frequent congestion. Congested transmission paths, or “bottlenecks,” now affect many parts of the grid across the country. In addition, it is estimated that power outages and power quality disturbances cost the economy from $25 to $180 billion annually.

  19. Thomas Rodd says:

    Red Desert, thanks for the Vaclav Smil post. There are a lot of comments that take him to task for questioning the imminence and severity of climate change. Andrew Revkin gets some similar criticism. Personally, I’ve chosen to accept the grim “hell and high water” views of Joe Romm, based on my conversations with a friend who has been doing climate policy a long time. Thanks again for the link.

  20. A-mouse says:

    I just became a fan of Smil last week, to an extent of course. But he does say something interesting in relation to CCS (and Ken and Tom, Smil’s one smart fella):

    Sequestering a mere 1/10 of today’s global CO2 emissions (< 3 Gt CO2) would thus call for putting in place an industry that would have to force underground every year the volume of compressed gas larger than or (with higher compression) equal to the volume of crude oil extracted globally by a petroleum industry whose infrastructures and capacities have been put in place over a century of development (Smil, 2003).

    Smil concludes that “There are simply too many unknowns to commit enormous investments to an undertaking whose results could be obtained in many more preferable ways…. The obvious question is why [CCS] should be even attempted given the fact that a 10% reduction in CO2 emissions could be achieved by several more rational, mature and readily available adjustments.”

    In addition to Smil’s comments, and keeping in mind the original discussion here, the question should be asked: Given the economic and environmental challenges facing society today, the scale of CCS deployment required for reducing the nation’s impact on the climate, and the uncertainties related to technology, infrastructure, and storage capacity, would the best investment that can be made for achieving projected increases in electricity demand and meeting national goals for CO2 emission reduction be with renewables and efficiency??

  21. Red Desert says:

    Thanks rh mooney,

    May I add something to your comment? (We all know this, but it’s just a reminder.) The big coal plants have turned over much more slowly since the Clean Air Act. As others have pointed out, the Clean Air Act has been an enormous success and has saved and improved uncounted lives and really made a difference in air quality nationwide.

    But it has also given these old, dirty and efficient plants an economic advantage–even with the SOX cap and trade amendments–over new plants and greatly prolonged their lives.

    Something similar is happening with Waxman-Markey, it will also make new coal plants much, much more expensive than continuing to operate the old plants. There needs to be a comprehensive plan to begin retiring those old plants–because of their terrible the inefficiencies if nothing else. The utilities (or Wall Street) seem to want to keep running these things for a few more decades and possibly longer and perpetuate the idea that CCS can be bolted on sometime (just not now) down the road.

    A note to William DePaulo,

    I’m not sure I’m comfortable (or know enough about law to be) with the term “negligent homicide”, but I’m sympathetic with you line of thinking. And I’d like to add, we are all complicit.

  22. Red Desert says:

    RH Mooney,

    One more thing–don’t forget that there is a way to make it profitable for the utilities to “sell” efficiency on the demand side–it’s called decoupling. California has it and it has really worked.

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