Another subsidy for coal: Washington Post today on flawed coal auctions in the Powder River basin
The Powder River Basin, one of the biggest sources of coal in the Western US, has a system for leasing mining rights that is deeply flawed, and has cost taxpayers “as much as $28.9 billion over the past 30 years”. From the article in the Washington Post today:
Powder River Basin coal leasing prompts IG, GAO reviews
By Juliet Eilperin, Sunday, June 24, 5:25 PM
The government’s longtime practice of auctioning coal mining rights to a single bidder may have cost taxpayers as much as $28.9 billion over the past 30 years, according to an analysis to be released Monday by the Institute for Energy Economics and Financial Analysis, a Cambridge, Mass.-based think tank.
The non-competitive nature of the federal leasing program is being reviewed by the Interior Department’s inspector general and also will be the subject of an audit by the Government Accountability Office, according to officials at the Bureau of Land Management, which oversees the leasing program.
As I’ve discussed before, there’s nothing more consistent with economic efficiency (not to mention individual responsibility) than charging people the true costs of their actions, and subsidies like the ones described in this article distort economic choices in a significant way. Time for them to end!
For those interested in the unpaid externalities of coal and other fossil fuels, I refer you to two refereed journal articles from last year:
Muller, Nicholas Z., Robert Mendelsohn, and William Nordhaus. 2011. “Environmental Accounting for Pollution in the United States Economy.” American Economic Review vol. 101, no. 5. August. pp. 1649–1675.
Epstein, Paul R., Jonathan J. Buonocore, Kevin Eckerle, Michael Hendryx, Benjamin M. Stout Iii, Richard Heinberg, Richard W. Clapp, Beverly May, Nancy L. Reinhart, Melissa M. Ahern, Samir K. Doshi, and Leslie Glustrom. 2011. “Full cost accounting for the life cycle of coal.” Annals of the New York Academy of Sciences. vol. 1219, no. 1. February 17. pp. 73-98.
Addendum, June 25, 2012: Don’t forget the campaign to #EndFossilFuelSubsidies.
