Lawrence Solomon
FP Comment
April 24, 2008

Coal is back, despite — and perhaps also because of — attempts to beat it back.

Britain abandoned coal big time after Maggie Thatcher privatized the energy industry system in the 1980s. With the energy industry forced to meet market tests, coal fields were shut down, coal-fired power plants were shut down, and coal-related emissions plummeted. Economic efficiency worked wonders for both the economy and the environment.

In recent years, the UK has been moving away from the market system — the strictest in the world — that Thatcher ushered in. A slew of climate change taxes and regulations have distorted the marketplace, in aid of reducing the country’s CO2 emissions. In this new, politicized environment, coal is surging. The north Midlands and Yorkshire mining industry, once considered all-but dead, are making a comeback, as is coal-fired power: The new Kingsnorth power station, set to open in 2012, will be Britain’s first new coal-fired plant in two decades. In all, the UK has eight coal-fired plants in the pipeline.

The coal renaissance is even more pronounced in Italy, which expects to more than double its reliance on coal in the next five years, from 14% to 33%. Germany and the Czech Republic are also warming to coal.

One factor in coal’s resurgence is the high cost of renewable energy alternatives. Artificially supporting wind and solar energy has increased energy costs that consumers face as well as hitting them through tax hikes. Politicians now ask themselves: Will voters punish me more if I hit them in the pocketbook or if I turn a paler shade of green?