Course:ECON371/UBCO2011WT1/GROUP3/Article6
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The Last Mountain
Summary
This article highlights the film "The Last Mountain" (2011). Alpha Natural Resources, who recently bought Massey Energy, is a coal mining mogul trying to get approval for the mining of Coal River Mountain, West Virginia, the last intact mountain ecosystem in the area. Alpha plans to use mountain top removal methods, which will devastate the mountain's ecosystem, and negatively impact (even endanger) the lives of residents living below the mine, with six residents already dead. The mountaintop removal process has brought down millions of acres of forests, reduced mountain ranges to rubble and generated toxic drinking water and driven up rates of cancer and autism in the Coal River Valley. As well, the mining project would cut-off the recreational and horticultural uses of Coal River Mountain. The project has been met with staunch opposition, specifically from Coal River Mountain Watch, who is fighting to protect this mountain and the communities living in the surrounding valleys. They have also produced plans for a wind farm project, which would produce $1 million per year, as opposed to the mining project's $300,000 for less than 20 years. However, these efforts have been ineffective, as Alpha shows no signs of conceding, and lenient regulations facilitate its efforts.
For more info on the Coal River Mountain Watch click here.
Analysis
Pollution
The primary reason for this fight is pollution problems. The coal dust from explosion caused serious water and air pollution around the community. As the video shows, the coal dust from the mining site sticks to building, surfaces and flows into the water source. Research shows that coal dust causes the disorders called coal workers pneumoconiosis (CWP) and progressive massive fibrosis (PMF)- commonly called black lung disease. These disorders can happen when people inhale too much coal dust over time and it accumulates in their lungs. Eventually, the accumulation of coal dust can cause tissue changes and lead to disorders like emphysema and fibrosis. The coal dust also pollutes the water supply which millions of people use and drink. 6 people had passed away from brain cancer since the entrance of 'Massey Energy'. Among the deceased were kids who were only 10 years old. The damages caused by coal dust are often latent, and can take many years to manifest. As well, coal dust can lead to indirect damages. These characteristics make it harder to measure the damages for coal mining and to provide sufficient evidence to the government.
Sustainability & Environmental Decay
The sustainability of the mine poses another problem. As the article states, the mine would only operate for approximately 20 years, providing limited gains in the long-run. As well, after all of the coal deposits have been exploited, the mining company would withdraw from Coal River Mountain, leaving an unsightly strip mine and various pollutants for many years to come. Conversely, the wind farm would provide a sustainable industry, provided the windmills were maintained, and would have little to no effects on the environment as a whole.
Cost-Benefit Analysis
A cost-benefit analysis would allow for an unbiased analysis of all costs and benefits, determining if the benefits of continued coal mining would exceed social and private costs. In terms of the analysis from the information presented in the article, it would be difficult to determine whether or not all the benefits would exceed the costs. But it is indicated that the negative externalities from the mining operation have been the likely cause of several deaths in the area. It has also been indicated that the mine has likely caused a decrease in overall health to many of the residents in the local area. In terms of benefits, cheap non-renewable energies, such as coal, help to lower energy costs and allow many individuals throughout the country to benefit from cheap energy. If a cost benefit analysis were to be conducted using a fair discounting method, I would assume that the private and social costs would exceed the private and social benefits, when the local community has standing. As the community seems to be experiencing the majority of the negative externalities. If the entire country was to be given standing, I would assume that the benefits from the cheap energy would exceed all costs, as many individuals throughout the country experience large benefits, while only a few experience large costs. This assumes that the air pollution throughout the rest of the country is limited, and the majority of all negative social costs occur in a single small community. The results of cost-benefit analysis seem to be dependent upon the discount method and the determination of whom has standing.
Social Costs
There are many social costs associated with the extraction of coal, many of which are not included in the market price of coal. Some of the costs include water contamination, habitat destruction, and air pollution. These negative social costs can also be referred to as negative externalities, as most of the negative effects are not felt by the mining company, but internal by the community as a whole. As far as the mining company is concerned these social costs have little to no effect upon the mine itself, as mines are typically only concerned with its own specific private costs. If the cost does not effect the mines bottom line, then it will be ignored unless the local communities require the mining company to be held accountable for all negative externalities that it creates. This is a difficult task, and becomes more difficult in times of economic down turn, when major companies, such as Alpha Natural Resources, tend to be the only employer in rural communities. This does not justify the exclusion the negative externalities, but indicates the growing importance of the inclusion of all costs.
Pareto Optimality
The proposed alternative to the mine, the wind farm project, would be more socially efficient. Society would receive more money per year ($1,000,000 vs. $300,000) and the social costs would be much less (wind farms do not create the pollution problems that coal mining does). Thus, the wind farm project would be the Pareto optimal solution, and would even generate enough net gains to compensate the mining company; however, it is hard to guarantee that the mining company would in fact be compensated.
Conclusion
Opposition to this coal mining project has risen as it has been determined to be the cause of a number of negative externalities and social costs in which the small community has incurred both environmental degradation along with human health concerns. Although the wind farm would also can also be considered unsightly, it would generally be considered more visually appealing and would not subject the local communities to the aforementioned health concerns. While a shift towards the wind farm project would seem to be a more sustainable approach, benefits of coal mining do exist, depending on the question as to who has standing. A cross-benefit analysis of both the continuation of coal mining, as well as one of the potential wind farm project, would then be essential in determining the efficiency of the projects and thus the decision of whether to continue with this mountaintop removal mining or to save "the last mountain."
Prof's Comments
Pretty good. You are a bit off on the definition of Pareto optimality. A pareto optimal solution means that nobody is worse off and some are better off than at other situations. In this situation, building the wind farm would probably leave the mining company worse off, which is why it is opposed.
Could a Coasian solution work here? How about liability?
8/10