How It Happens

[TheReal_ND]

Ugh. Dude what?

[Speaker to Animals]

Coal would go out of business pretty fast if they were forced to pay for their negative externalities.

[TheReal_ND]

Negative externalities?

[Fife]

All externalities are negative.

Who among you will show me a "positive" externality (to other than a rent-seeker)?

And, yes, if coal did not have the power of the state helping it to point a gun at everyone's head to stay in business, the market could have already addressed this.

[BjornP]

Negative externalities?

Kobolds. Tainting the iron ore to provoke mass-scale class warfare in the name of Bhaal.

[Speaker to Animals]

Negative externalities?

A negative externality occurs when an individual or firm making a decision does not have to pay the full cost of the decision. If a good has a negative externality, then the cost to society is greater than the cost consumer is paying for it. Since consumers make a decision based on where their marginal cost equals their marginal benefit, and since they don't take into account the cost of the negative externality, negative externalities result in market inefficiencies unless proper action is taken.

When a negative externality exists in an unregulated market, producers don't take responsibility for external costs that exist--these are passed on to society. Thus producers have lower marginal costs than they would otherwise have and the supply curve is effectively shifted down (to the right) of the supply curve that society faces. Because the supply curve is increased, more of the product is bought than the efficient amount--that is, too much of the product is produced and sold. Since marginal benefit is not equal to marginal cost, a deadweight welfare loss results.

http://economics.fundamentalfinance.com ... nality.php


Example:

Health problems linked to aging coal-fired power plants shorten nearly 24,000 lives a year, including 2,800 from lung cancer, and nearly all those early deaths could be prevented if the U.S. government adopted stricter rules, according to a study released Wednesday.

Commissioned by environmental groups and undertaken by a consultant often used by the Environmental Protection Agency, the study concluded that 22,000 of those deaths are preventable with currently available technology.

http://www.nbcnews.com/id/5174391/ns/us ... eAQgXBrxFQ

That's just the costs in terms of lives. The total numbers of cancers is pretty high. The coal industry doesn't pay any of the negative externalities their industry creates. In the context of coal power plants, the energy companies should be required to compensate the state for however many cancers are statistically linked to their operations, and that money should be used to help offset the costs to patients.

An attempt to calculate the total costs of coal mining and power was made by Reuters seven years ago:

The United States’ reliance on coal to generate almost half of its electricity, costs the economy about $345 billion a year in hidden expenses not borne by miners or utilities, including health problems in mining communities and pollution around power plants, a study found.

Those costs would effectively triple the price of electricity produced by coal-fired plants, which are prevalent in part due to the their low cost of operation, the study led by a Harvard University researcher found.

“This is not borne by the coal industry, this is borne by us, in our taxes,” said Paul Epstein, a Harvard Medical School instructor and the associate director of its Center for Health and the Global Environment, the study’s lead author.

“The public cost is far greater than the cost of the coal itself. The impacts of this industry go way beyond just lighting our lights.”

http://www.reuters.com/article/usa-coal ... 8020110216


I feel for those miners, but coal is absolute shit.

[TheReal_ND]

Yeah wtf did you just post?

@fife:

There is a little bit of rent seeking going on with the EPA involving things like soot catchers but tbh, if somebody didn't do it, nobody will. I've worked with too many companies that treat hazmat recovery like a joke. In one case they literally just payed the commissioner off and let the people down stream deal with it.

[Speaker to Animals]

All externalities are negative.

Who among you will show me a "positive" externality (to other than a rent-seeker)?

And, yes, if coal did not have the power of the state helping it to point a gun at everyone's head to stay in business, the market could have already addressed this.

On-the-job training and certification.

Most major corporations pay for their employees to go to graduate school part-time. If those employees move on to other careers, they brought the training, education, and skills the previous employers paid to provide them to the new employer. That's a positive externality.

[Fife]

In the world of economics, all externalities are "negative."

Outcomes imposed through actions of anyone other than the people involved with skin in the game are are always negative.

Think about the etymology of the economic term of art "externality," and you will get it.

[edit; corrected to correct recursive bitch being a recursive bitch :extgrin:]

[Fife]

All externalities are negative.

Who among you will show me a "positive" externality (to other than a rent-seeker)?

And, yes, if coal did not have the power of the state helping it to point a gun at everyone's head to stay in business, the market could have already addressed this.

On-the-job training and certification.

Most major corporations pay for their employees to go to graduate school part-time. If those employees move on to other careers, they brought the training, education, and skills the previous employers paid to provide them to the new employer. That's a positive externality.

Uh, but not an "externality," positive, negative, or otherwise.

That's just a wage function, and a damned good one, IMNSHO.