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Cash for (Coal) Clunkers

If paying people to junk fuel-inefficient and polluting cars stimulated the economy, and made a lot of people happy too, why not pay companies to scrap fuel-inefficient and polluting coal generating plants?

2 min read

Preparing a recent talk for the New England section of IEEE's Power and Energy Society ("How Can We Best Achieve Deep Cuts in Carbon Emissions?"), a lightbulb lit up over my head: Instead of encouraging energy companies to switch from coal to low-carbon or zero-carbon energy sources such as nuclear fission, natural gas, or wind by imposing a carbon trading system or a carbon tax, why not just pay them to switch? The dirtiest U.S. coal plants, besides being responsible for about two fifths of U.S. greenhouse gas emissions, are also blamed for about 10,000 premature fatalities each year. Admittedly, the thought of bribing parties to stop causing early deaths may stick in the craw a bit. But if that's the most effective way of getting the job done, hey, why not?

There's a very deeply ingrained notion that the United States just can't afford to shut down half its coal plants because the country's coal is so plentiful and cheap. But that's wrong. The comparison I've often made is to the feelings one has about a very good, very cheap, and very reliable car that also happens to be very old—one of the classic great cars, like the 1951 Plymouth or the Dodge Dart of the 1960s and the Oldsmobile Omega of the Seventies and Eighties. Consumers hung on to those cars because they were so inexpensive to maintain and operate. But was a 1951 Plymouth, with no seatbelts, catalytic converter or electronic diagnostics, still a great car in 1981? Obviously not. And nor are the country’s dirtiest coal plants, which are churning out electricity using technology that's not too different from what it was generations ago, good plants today.

You think you can't afford to replace that dirty and unsafe old car; but actually you can easily afford to. You just need a little nudge.

So that's why, contemplating the difficulties the United States has had agreeing on a carbon trading system or carbon tax, it occurred to me that it might just be easier to pay utilities to pour concrete into their aging coal plants the same way we just paid consumers to disable their car clunkers. After all, the cash for clunkers program gave the economy a distinct little boost, and quite a few families ended up with better cars that were smaller, more fuel-efficient, and less polluting.

Of course there was always the sour puss who called cash for clunkers a clunker of a concept, ourselves included. Maybe you're in trouble when you have to call upon Jeffrey Sachs, the Columbia Earth Institute's controversial leader, when you need to be brought back down to earth. Writing in the current issue of Scientific American, Sachs argues that the car program was a clunker of a climate policy: He reckons the cost of each metric ton of carbon saved at about $140--seven or eight times the level at which carbon has been trading.

That's a compelling argument. But remember: Cutting carbon was not the only reason or even the main reason for cashing in car clunkers; and nor would cutting carbon be the only compelling reason to cash in coal clunkers. 


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Greg Mably

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