Billions of Taxpayer Dollars a Year Spent in Support of Coal Industry

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By Dylan Lenzen

Despite recent efforts by the federal government, such as the EPA’s Clean Power Plan, to phase out one of the dirtiest forms of energy generation in coal power plants, a new report shows the US government still provides ample financial support to the coal industry by spending billions of taxpayer dollars on subsidies.   According to this recent report, the US government subsidizes the coal industry to the tune of $2.9 billion a year in the Powder River Basin alone. These subsidies come in the form of direct spending, tax breaks and exemptions, discounted leases, government-funded infrastructure, and reduced funding for cleanup efforts after mining is complete.

This report comes as the climate change, public health, and environmental justice effects of coal energy generation are increasingly being realized. Coal power plants are responsible for roughly one-third of the America’s carbon dioxide emissions. On top of that, coal power plants have long been associated with adverse health effects as a result of toxic SO2, NOx , and particulate matter emissions that lead to billions of dollars in healthcare costs. In addition, according to a report by NAACP, the negative effects of coal power are more likely to be experienced by low-income and minority communities, as power plants are often located in such areas.  Also, NAACP found that the worst performing coal power plants disproportionately affect low-income people of color. So, not only are American citizens forced to bear significant costs of coal energy generation in the form of adverse health effects, but also through their tax dollars, which subsidize the industry and support its proliferation.

While efforts, such the EPA’s Clean Power Plan, are working to reduce coal power’s contribution to climate change and negative public health outcomes, authors of the study on coal subsidies argue that the elimination of this financial support would be the best route to take in order to phase out the dirty energy source. The authors of the study suggest that elimination of subsidies going to the Powder River Basin would result in CO2 emission reductions that are equivalent to closing 9 to 32 coal power plants.

The US and other governments also support other forms of fossil fuel energy generation through subsidies. The International Monetary Fund recently estimated that coal, oil, and gas were supported by $5.3 trillion in subsidies. This figure includes not only direct subsidies, such as tax breaks, but also indirect costs imposed on society that result from the adverse effects of pollution and climate change.

So, maybe the United States government deserves some credit for their work in enacting the Clean Power Plan, but efforts will not adequately address the issues of coal energy generation until the US eliminates opposing policies such as coal subsidies.

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