Monday Morning Review
Last week, Senator Jay Rockefeller gave an historic and courageous speech on the future of coal and the EPA (MACT) rule to limit contaminants and mercury emissions from coal fired power plants. Ken Ward analyzes the speech at Coal Tattoo so we don't have to.
As the Center for American Progress (CAP) points out, this action is to correct a "market failure" that allows coal plants to externalize the costs of harmful emissions that exact a huge economic toll on people around the country. According to CAP, the mercury rule will provide $790 million in health benefits and will save 96 lives in West Virginia. Let's hope the free market folks offer praise for the rule since it impedes on the economic freedom of others to live out their lives.
In response to Rockefeller's speech, The Daily Mail had an editorial saying the mercury rule was a "loony policy" because most mercury emissions are natural instead of man made. The Daily Mail based its opinion on a industry funded study by Willie Soon and Paul Driessen that the watchdog group Media Matters debunks here. It is well worth a read.
In other energy related news, Ohio State University recently released a study on shale development in Ohio. The authors find that Ohio needs to protect itself from the boom and busts of the energy economy. They point to the Appalachian coal boom of the 1970s as example of the "vicious cycle of the resource bust.":
- A boom in one sector of the economy, such as coal mining or shale gas and oil extraction, leads to a strong, often sudden, growth in
low-skill, high-paying jobs in that sector.
- The availability of such jobs leads young workers away from advanced education or other high-skill training opportunities.
- Other industries avoid the region because of both the reduced job skills in the workforce and the higher wages in the area.
- As the availability of the natural resource wanes due to extraction -- or when its value decreases due to other economic forces --
employment in the sector drops precipitously.
- With no other viable options, the economic decline causes workers to migrate out of the area in search of other opportunities.
As readers of this blog might remember, we released a similar report last year cataloging the legacy of the boom and bust cycle in West Virginia and how the state needs to find ways to invest in human and physical infrastructure to offset its harmful effects. One of those solutions is to create a economic diversification trust fund.
Last week, Citizens for Tax Justice released a report that looked at the two competing proposals from the House and Obama to extend the Bush tax cuts. The report compares how people at different income levels would be affected. We issued a press release last week that highlighted that middle-income and low-income West Virginians would pay somewhat more in taxes under the House's approach to extending the Bush tax cuts than they would under President Obama's approach, while high-income West Virginians would pay far less under the House approach. As the chart below shows, only the richest 1 percent of West Virginians would gain more from the House's approach to the Bush tax cuts.