Much has been said and written about the environmental cost of coal subsidies. They can prop up uneconomic coal extraction and encourage new entry and expansion that would not otherwise occur – both of which scenarios could increase carbon emissions worldwide and speed up global warming.
But what about the economic cost? A new report has revealed that the financial “propping up” of the Australian coal export industry, through a range of government subsidies aimed at boosting production, is cost costing taxpayers roughly $5.2 per tonne of coal produced, or a total of $1.8 billion a year.
The report – a combined effort from Carbon Tracker, Energy Transition Advisors, Earth Track and the Institute for Energy Economics and Financial Analysis (IEEFA) – focuses on the cost of production subsidies for fossil fuels, as opposed to subsidies aimed at boosting consumption.
The report further focuses on subsidies for thermal coal, the most carbon-intensive of the fossil fuels, and their impact in a 2035 framework based on to two key markets: America’s Powder River Basin, and Australia.
Press link for more: Sophie Vorrath | reneweconomy.com.au