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PRI's Environmental News Magazine

Coal and The Economist

Air Date: Week of July 12, 2002

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The British business magazine The Economist focuses on coal this month, calling it Environmental Enemy Number One. Host Steve Curwood talks with the magazine’s energy and environment correspondent, Vijay Viatheeswaran about the cover story.

Transcript

CURWOOD: Environmental activists have long warned about the dangers of fossil fuels. Now the British business journal The Economist is joining the chorus. The cover of its current issue reads: "CO2AL, Environmental enemy No.1." The issue also opines that markets could be a potent force for greenery if only greens could learn to love them. Vijay Viatheeswaran is the Energy and Environmental Correspondent for The Economist. And he joins me now from London. Welcome to Living on Earth.

VIATHEESWARAN: Hello.

CURWOOD: Tell me, how did coal make it onto the cover of The Economist as "environmental enemy No.1?"

VIATHEESWARAN: First of all, more than any other fossil fuel it's particularly carbon-intensive, and it's so much more abundant. It's very clear that we can burn all of the conventional oil, and conventional natural gas that's in the ground, and still meet very aggressive targets for climate change.

But if we burn even part of the coal that's spread all over the world, then we're in real trouble. The final reason is the most important one. That's human health. There's no dirtier fuel out there, frankly. Coal is nasty stuff. And, the current ways that we burn it are very dirty, particularly inefficient, and they do a lot of harm to human health.

CURWOOD: How can market forces help to reduce the use of coal? The stuff is cheap.

VIATHEESWARAN: It's a good question. Many people imagine that markets are, fundamentally, the enemy of the environment. First, nobody that believes in markets, and free markets, would allow coal to get a free ride the way it does. For example, in a lot of rich countries, Germany and Spain are good examples, they give cash to coal producers to encourage them to produce more coal and to lower the price. Now, that's outrageous when you think about the harm that it does to the environment.

In America, too, it's a more implicit form of subsidy. But, old coal plants don't have to meet current environmental regulations. So, when one talks about market forces, I would say, first of all, get rid of the subsidies and the free ride. The flipside of that, I would say, that's still not enough. And classical economists would argue you need to get prices right. That means rolling in the environmental and human health harm caused by all kinds of fossil fuels.

In some countries in the world, particularly in Europe, they impose carbon taxes or various kinds of taxation on top of the market price. And, that's very specifically meant to take account of the harm that it does.

CURWOOD: Let's look a little closely at how the U.S. handles this. How does the U.S. stand in terms of our free trade, our free market economic approach vis a vis coal?

VIATHEESWARAN: This is the great irony. America is thought of, the land of the free, and the free market. But when it comes to environmental issues, America is very much a Stalinist economy. It is, fundamentally, a command and control, top-down, dirigiste regime of environmental legislation that started in the early '70s with the Clean Air Act, the Clean Water Act, much cherished, hard fought environmental laws that have done a lot to clean up the air and water in America.

The point, though, is it uses a very, very blunt instrument, mandate, litigate, regulate. Those tend to be the buzz words of environmentalists in America. And, in fact, what that means is that you're imposing much, much heavier cost to achieve the same thing. You're imposing technology mandates, for example. You're telling everyone in a particular industry, let's say, you all must adopt this very specific technology, or else we'll sue you or throw you in jail because we want to achieve a certain kind of environmental good.

There are more efficient, smarter ways of achieving the same environmental good using economic incentives, using markets, for example, in tradable permits, giving property rights. And, this is the area that America, actually, lags the rest of the world in.

CURWOOD: Let's just say, for the sake of the discussion, that at the White House somebody walked in with a copy of The Economist. President Bush looked down and saw that you guys had declared coal as environmental enemy number one, and he said, "Boy, maybe they're on to something." How could President Bush satisfy both those concerns about the environment, environmental advocates and business, which has a lot at stake here?

VIATHEESWARAN: If I were in on this conversation, I'd say, "Mr. President, this is your chance to save yourself on the environment and on global warming." Now, we all know this is an area where he's gotten beaten up after walking out of the Kyoto Treaty on Climate Change.

Here's a plan that I put forward that says be pragmatic. Coal is going to be part of the future for decades to come, especially in poor countries. On the other hand, it is still environmental enemy number one. Technology can help get us from point A to point B, that is, the ways of using coal in a lot cleaner ways. These are technologies that American companies, energy companies, are pioneering. This will be, actually, the greatest gift that he could give to the coal industry and the energy industry, is to throw them a lifeline and show how they can be compatible with a cleaner energy future.

CURWOOD: What response to your article has your magazine received from its readers?

VIATHEESWARAN: Well, I can tell you, it's stirred up quite a hornet's nest. The environmentalists on one side feel slighted because other environmental problems don't get the top cover. I've already gotten various letters from various sectors in the energy industry saying, "This is unfair. You're picking on us." The technologists have written in saying, "Well, your ideas on how you can use coal, these are too simplistic. Don't you understand this is very complicated? This is going to take a long time."

Fundamentally, I think that when you make a provocative argument like this, you're going-- I am only pleased that people on all sides are throwing tomatoes at me. It means I might be on to something.

CURWOOD: Vijay Viatheeswaran is the energy and environment correspondent for The Economist in London. Thanks for taking this time with us today.

VIATHEESWARAN: It's been a pleasure.

CURWOOD: And you're listening to Living on Earth.

[MUSIC: THE BIONAUT, "LUBRICATE YOUR LIVING ROOM," MATADOR, 2001]

 

Links

Living on Earth Today, July 11, 2002

"Environmental enemy No. 1" (The Economist, July 6, 2000)

The Economist's Survey on The Global Environment

 

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