My latest post for U.S. News & World Report describes how current coal-leasing policies on federal land fail key economic tests, drawing on a new report from the President's Council of Economic Advisers discussed recently at Resources for the Future. Here’s an excerpt:
We should reform those policies, the report says, by charging producers more to mine coal on federal land, boosting federal revenues and better ensuring a fair return to taxpayers. At the same time, the report notes, such reform would reduce environmental damages from extracting and burning coal, since less coal would be produced at the higher price. A further benefit, which the report doesn't discuss, is the potential for policymakers to use the larger leasing revenues for public purposes such as providing transition assistance to coal miners and coal-dependent communities as the country makes the inevitable transition to a greener economy.
As a recent Brookings analysis of the plight of these workers explains, a robust transition-assistance program would require only a small percentage of the revenues that a comprehensive carbon tax would raise. That would leave plenty of revenue to cushion the impact of higher energy prices on low-income households and for other public purposes.
Coal-leasing reform would have far smaller economic, revenue, and environmental effects than a carbon tax, but as my post concludes,
[T]he principle is the same: revenues would be available and, if used wisely, could protect vulnerable populations while ensuring a fair return to taxpayers and reducing greenhouse gas emissions.