Talking coal subsidies

Kudos to Sierra Club and Synapse Energy Economics for taking a look at coal subsidies.  In a report released yesterday, the authors highlight the disparity between Administration goals to cut greenhouse gases and continued federal policies that subsidize coal. 

The paper is a great first step into an area that has not gotten enough attention.  I hope it will be a conduit to more analysis and transparency of this important issue.  I'd like to see a systematic review of the growing array of subsidies to carbon capture and storage, of particular benefit to coal plants.  More work as well is needed on coal-to-liquids technology, an area that in the past even (then-) Senator Obama has sought to include in federal renewable fuel standards. 

More resolution on state-level support (following on this work in Kentucky) would also be helpful, and should include states such as Pennsylvania that include coal bed methane as a top tier resource in their "advanced energy portfolio standard" and waste coal as a second tier resource.   Finally, more work to evaluate the impact of the current suite of subsidies on the economics of new investment would be extremely useful.

Fundamental policy questions need to be answered.  Even if one accepts as given that coal will be part of the energy equation for some time to come, should that imply that we should subsidize it's place at the table?  If a main benefit of many renewable energy technologies is that they are low carbon, doesn't subsidizing the cost of handling carbon in the coal sector rather than letting the full cost flow through in market prices go directly counter to the country's energy transition goals?  This core issue relates not only to CCS subsidies, but to potentially even larger windfalls through grants of emissions credits under the various cap and trade scenarios.  Finally, if the industry itself doesn't think greenhouse gas emissions are a game-changing event requiring a massive research and retooling program, why should taxpayers foot the bill?