Mining’s environmental costs are high, but many residents of coal-mining communities support continued mining because they rely (directly or indirectly) on mining jobs. Now, reports Ken Ward Jr. of the Charleston Gazette, two researchers have put price tags on the economic costs and benefits of coal mining in Appalachia, and found that the benefits don’t even come close to covering the costs:
Writing with co-author Melissa Ahern of Washington State University, [West Virginia University’s Michael] Hendryx reports that the coal industry generates a little more than $8 billion a year in economic benefits for the Appalachian region.
But, Hendryx and Ahern put the value of premature deaths attributable to the mining industry across the Appalachian coalfields at — by one of their most conservative estimates — $42 billion.
“The human cost of the Appalachian coal mining economy outweighs its economic benefits,” they wrote.
The paper has just been published in the peer-reviewed journal Public Health Reports, but it’s available only to subscribers. In his article, Ward goes into some detail about the methodology:
In the new study, Hendryx and Ahern cited a 2001 University of Kentucky study that valued the economic impact — from direct, indirect and induced earnings — of the coal industry in Appalachia at $6.5 billion a year. They adjusted that number for inflation, and added other benefits from various coal industry taxes.
The researchers also factored in the recent declines in coal industry employment.
“The number of coal miners in Appalachia declined from 122,102 to 53,509 between 1985 and 2005,” the paper said. “This decline corresponded to increases in mechanized mining practices and the growth of surface mining, which requires fewer employees than underground mining per ton mined.”
After these calculations, Hendryx and Ahern came up with a final annual regional economic gain of $8.1 billion.
Next, Hendryx and Ahern calculated a number of excess age-adjusted deaths in coal-mining areas, compared to non-coal areas of the region. The number varied from 3,975 to 10,923, depending on the years studied and comparison group. Then, they plugged in what they described as a low estimate of the value of life — about $3.8 million — and, using the highest number of excess deaths, got a figure for the cost of coal-related excess deaths of $41.8 billion a year.
At his Coal Tattoo blog, Ward hosted an online chat with Hendryx. Here’s an exchange between the two about what the study didn’t capture:
Ken Ward Jr.: Would it be fair to say that the numbers you used to calculate the economic benefits of coal were broad and pretty inclusive, but that the numbers you have used for calculating the costs are not as broad — and perhaps leave out many things that a true cost-benefit analysis would want to include?
Michael Hendryx: I think that is a fair statement. I may not have been able to count all tax benefits, such as property or business taxes, but otherwise the benefits are pretty well captured I think. I was not able to estimate some of the additional costs, like medical care costs for increased illness. I also couldn’t estimate the costs of destroying natural resources like forests and streams; some limited research on this suggests that those costs could be enormous and outweigh even the mortality costs.
In a blog post about the story, Ward points out that studies like this one ought to be of great interest to lawmakers who are figuring out their positions on future coal-mining activities. When Ward contacted West Virginia Governor Joe Manchin about a previous study by Hendryx on the impacts of coal mining, though, Manchin passed it off as a federal issue. These days, though, the Manchin administration is telling the federal government not to meddle in West Virginia’s coal business. Perhaps now that Governor Manchin has decided that coal mining is actually an issue to be handled at the state level, he’ll be interested in this latest study.
Finally, from the chat, here’s Henryx’s recommendation for what should change, given the huge gulf between coal-mining costs and benefits:
Coal mining counties and towns should receive more of the coal severance tax, and less should go to state government. The tax should be used to promote education and job creation.
Also, air and water quality around mining should be more carefully monitored and controlled. And mountaintop mining should be eliminated.