Tuesday, May 01, 2012
Buying and closing coal mines to benefit climate
Interesting idea (paper here, summary article here) that some fossil fuels have sufficiently low profit margin that buying the mineral rights to them might be the cheapest way to keep them from being burnt. For example, tar sands take a lot of energy to get out of the ground, reducing profit margins. This might become even more important in the future if we start pricing carbon, making the value of the resource less while increasing the cost of getting the resource out (if we fully taxed carbon this wouldn't be necessary, so I guess our grandchildren can skip this step). The author points out that it's not very different from the REDD process for rewarding countries that refrain from destroying tropical forests. Saving forests does have huge ancillary benefits, but I suppose the same is true from reducing ancillary pollutants from fossil fuels.
This sounds like another version of an offset to me, which doesn't automatically make it bad in my opinion. It does create the same issue though of making sure you achieve real savings, instead of throwing money at mineral rights for an economically-worthless coal seam that never would've been mined.
I think I like the above part of the analysis better than the major component, arguing that reducing fossil fuel demand through demand reductions just makes fuels cheaper to buy in countries that aren't serious about climate change. I think this has some validity, but that long term energy plans, like Mexico's recent climate laws, involve fuzzier politics of where people think the world is headed. Decarbonizing the developed world will put real incentives to do the same in the developing world, as will carbon tariffs.