White House Says Raising Taxes On Coal Would ‘Improve Economic Efficiency’

war on coalThe White House released its report on the effects of raising royalty rates for coal mining on federal lands, and in it, officials argue raising rates on coal — therefore decreasing production — would “improve economic efficiency.”

“Although the focus of this report is on ensuring a fair return to the taxpayer, there is strong economic evidence of large external costs from coal production, transportation, and consumption,” the White house reported Wednesday.

“For example, incorporating the social cost of carbon in coal royalties would imply a royalty rate greater than 100 percent, implying that an increase in royalty rates could improve economic efficiency both due to fair return to the taxpayer and environmental externality considerations,” officials wrote.

The report is part of the Obama administration’s plan to reform coal leasing on federal lands. For years, environmentalists have argued the government wasn’t charging coal companies enough to mine on public lands, mostly in Wyoming and Montana, which activists say hurts the environment and shortchanges taxpayers.

The Obama administration agreed and put a moratorium on new coal mines on federal lands while bureaucrats review the possibility of raising coal mining rates. Environmentalists cheered the move, but the coal industry was less than happy.

“Today’s White House report once again puts politics ahead of practicality,” Laura Sheehan, lead spokeswoman for the American Coalition for Clean Coal Electricity, said in an emailed statement.

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