Cost-Benefit Analysis of Coal Trains Deep in Red

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Byline: GUEST VIEWPOINT By Ernie Niemi

Eugene City Council members soon will weigh the pros and cons of a proposal to ship coal by train through the city to the Port of Coos Bay. The coal - 10 million tons per yea - would be shipped to Asian countries, where it would be burned for electricity and manufacturing.

Much of the discussion likely will focus on the jobs, coal dust, and other local effects that directly would accompany coal exports. Far more serious effects, however, would materialize both here and elsewhere as the coal is burned.

Most benefits from exporting coal would accrue to the companies that export it and the countries that import and burn it. The primary local benefit would be jobs. A study of the proposal estimates that, at full operation, coal exports would generate 544 jobs in Oregon, paying a total of about $36 million per year.

The local costs would affect more people, but would be harder to see . They include impaired health for people exposed to coal dust, as well as deaths, injuries and property damage from train-related accidents. The trains passing through town also would generate delays at rail crossings and noise pollution for nearby homes, businesses and parks.

The most serious cost of coal exports, however, would materialize as the coal is burned, producing carbon dioxide. Data from the federal Environmental Protection Agency indicate that burning the coal shipped through Coos Bay each year would produce about 18 million metric tons of carbon dioxide.

These emissions would accelerate changes in the atmosphere and climate that are imposing costs on communities here and abroad. The costs materialize in countless ways. CO2 emissions are associated with more frequent and severe droughts and storms, and the expansion of insect infestations and wildfires.

In 2010, a federal task force, using existing data, attempted to monetize the costs resulting from CO2 emissions and reported that $21 per metric ton of CO2 is the best estimate of those costs. That value suggests that the burning of the coal shipped through Coos Bay would impose damage of at least $378 million annually on communities around the world.

A just-published critique of the task force's report argues that the costs from CO2 emissions would be higher - at least $55 per metric ton, and perhaps $250. Multiplying these numbers times the 18 million metric tons of CO2 that would result from burning the coal exported through Coos Bay indicates the annual economic damage would total $1 billion to $4.5 billion.

In other words, for every dollar of the $36 million of annual income the export of coal would generate for workers in Oregon, the subsequent burning of the coal would impose damage, somewhere in the world, of at least $10 and perhaps as much as $125. …