It’s time for United States coal companies to pay the real price of the resources they extract on public lands, two former government officials argue in a New York Times op ed.
When Congress last set a royalty rate for coal, it was based on a percentage of the sale price in 1976. Four decades later, one recent study found the U.S. missed out on $900 million to $5.6 billion in revenue between 2008 and 2012.
“This failure by the government to collect fair value for taxpayer coal is made more troubling by the climate-change implications of burning this fossil fuel. Taxpayers are already incurring major costs in responding to the effects of global warming,” write David J. Hayes, a former deputy interior secretary now teaching at Stanford, and James H. Stock, a former member of the U.S. Council of Economic Advisors who teaches at Harvard.
And “because of the long-lived nature of greenhouse gases in the atmosphere, these costs will continue to rise.”
In addition to closing several loopholes in the current royalty regime, “the federal government should also take into account the economic consequences of burning coal when pricing this fuel,” Hayes and Stock write. “The greenhouse gas burden from coal taken from government lands can no longer be ignored. Using a carbon adder to increase the royalties that taxpayers receive is a sensible step in the right direction.”