The real cost of coal is quickly add-"Cheap coal" is a myth

Social, legal and health issues related to unrestrained expansion of coal mines in Australia.

The real cost of coal is quickly add-"Cheap coal" is a myth

Postby HVPA_research » Wed Jul 18, 2012 11:51 am


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Tags: coal, NSW, Aust, jobs, royalties, subsidies, economics, 20120718


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We always hear about "oodles" of money that the coal mining industry brings into the government coffers. We hear much less about the social costs of the "cheap" coal and government subsidies. Even worse, we hardly ever see the both sets of economical figures in the same report. Now Linda Connor and Stuart Rosewarne from the Sydney Uni started to remedy the situation. We cannot thank them enough!

[url=[url][/url]]The real cost of coal is quickly adding up[/url]

We are paying the price for cheap energy, write Linda Connor and Stuart Rosewarne.

"Cheap coal" is a myth. And like all myths, we accept its wisdom without thinking.

On a recent ABC Q&A show, Senator Nick Minchin said Australians "are blessed with hundreds of years of coal and gas resources" that give us "a comparative advantage in cheap energy" providing jobs for "thousands upon thousands of Australians."

The NSW government and the Minerals Council praise the benefits of coal: besides employment, it is the source of huge company profits as well as mining royalty payments ($1.17 billion in 2010-11). Burning coal generates most of the state's electricity and coal is the state's largest export revenue earner.

But, what is the story behind coal? The number of people directly employed in mining in NSW is currently 47,600 or 1.36 percent of a 3.5 million workforce, with about 19,000 in the Hunter (6 percent of the region's workforce).

The benefits must be weighed against many hidden costs, including government subsidies to the industry; the damage to people's health and the environment; and lost opportunities because of failure to develop other industries, including "clean" energy

Both state and federal governments provide subsidies to the coal industry. Direct subsidies include coal terminal lease fees and providing infrastructure so that coal can be transported to electricity generators or to port loading facilities.

Recent federal government funding for the Hunter Valley Corridor Capacity Strategy rail upgrade totals almost $700 million, with further funding in the pipeline.

The whole mining industry receives a subsidy in the form of a tax credit on the diesel that fuels the trucks and machinery. Unlike the rest of us, mining companies do not pay the federal government tax on fuel. This subsidy currently amounts to $2 billion a year or an $87 annual contribution from every Australian.

Read the whole paper here: We have to stop believing in myths and return to reality. There is no other way.
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