Episode 146: Why do environmental regulations tend to adversely affect firms that extract or use coal?


Nick Muller
, a visiting professor at Carnegie Mellon University explains how environmental policies adversely affect firms that use coal.

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Environmental Accounting for Pollution in the United States Economy by Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus

EPA Regulations and Electricity from the U.S. Senate

Effects of a Carbon Tax on the Economy and the Environment from the U.S. Budget Office


Transcript

HOST: Why do environmental regulations tend to adversely affect firms that extract or use coal? On this week’s Energy Bite, Nick Muller, a visiting professor at Carnegie Mellon University, has some answers.

MULLER: Coal has a long history of use as a source of energy. Coal contains a variety of substances that make it a dirty source of energy. These include but are not limited to: sulfur, mercury, and carbon.

HOST: How does this impact firms that extract or use coal?

MULLER: Relative to the other fossil fuels (namely oil and natural gas) coal contains these substances in much higher quantities per unit of energy. Because of these differences in composition, most applications of coal as a source of energy produce more pollution per unit useful energy than the other fossil fuels.

As a result, when environmental policies are implemented that manage emissions of sulfur, soot, or carbon, these regulations will require greater compliance costs on the part of firms that burn coal than firms that employ other fossil fuels. Because coal contains more pollutants than other fossil fuels, firms that rely on this fuel tend to bear the brunt of environmental regulations.

HOST: Do you think coal is treated fairly when regulated for environmental reasons? Take our poll, see the results, and ask your energy questions at Energy Bite dot org.

ANNOUNCER: Energy Bite is a co-production between 90.5 WESA and Carnegie Mellon’s’ Scott Institute for Energy Innovation.

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