<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

The future of coal


The coal industry has massive costs to the public in terms of health risks.

Credit: sxc.hu

- Advertisement -

The Australian coal industry has been fighting furiously against the Gillard government’s plan to slap a price on carbon. The coal industry told the Climate Change minister Greg Combet to go back to the drawing board, plus they've upped the ante by threatening to close mines.

It’s no small threat. The coal industry is a major export driver for Australia. We are the largest exporter of coking coal which is used to make steel. As reported here, the coal price is now $130 a tonne. That's nearly three times the price five years ago, making it a nice little earner for the Australian economy.

Demand for our coal from the developing world is pushing up the price, and generating more greenhouse gas emissions. The Pew Centre on Global Climate Change tells us that coal generates 20 per cent of global greenhouse gas emissions with demand coming primarily from India and China, the world’s two fastest growing economies.

Still, the question needs to be asked whether it’s right for the future. The World Bank is already planning to restrict funding of coal fired power plants in developing countries.

Coal presents massive health issues. The Canadian Association of Physicians for the Environment (CAPE) says coal plants are a killer. Gideon Forman, executive director of CAPE, says: “Coal really is the dirtiest fuel around,” he said. “When you burn it, it creates a lot of lung disease. It creates a lot of climate change, acid rain and smog. Almost everyone knows a child with an asthma problem, for example. That’s going to be made much worse by the coal. We need to make the personal connections clearer to be public,” he said. “Air pollution makes it harder to breathe in the summer months; coal is a huge contributor.”

At the same time, a new study shows that the coal industry has massive externalities, or costs to the public in terms of health. In America alone, that come out to half a trillion dollars annually.

Some financial specialists are starting to write off coal as an industry that should not be supported. As the Washington Post reports, Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank has been savage in his criticism of the industry. "Coal is a dead man walkin'," he says "Banks won't finance them. Insurance companies won't insure them. The EPA is coming after them... And the economics to make it clean don't work."

Climate change is a health issue, and the coal industry is part of that mix. Putting a price on carbon will control the growth of the coal industry and force it to look at sustainability. In that sense, a carbon price is a public health measure.