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If I'm reading this right, they just added up the remaining amortized capital cost of the plants, doubled that to give the investors a return, and divided by th

If I'm reading this right, they just added up the remaining amortized capital cost of the plants, doubled that to give the investors a return, and divided by the amount of CO2 emissions that would be avoided. They don't mention cost of replacements, or the costs of climate damage.

jillesvangurp 2y ago
The fallacy of the cost argument here is that it fails to take into account the cost and economics of operating a coal plant. Coal energy is simply too expensive. Any time wind/solar pushes energy prices down, coal plants are operating at a loss. Shutting down and starting up coal plants is expensive too. A lot of the reduction in coal plant capacity is not driven by environmental concerns but by economics. This is investors cutting their losses. The cost of continuing to operate these plants is higher than the cost of just getting rid of them. Keeping these plants going requires ongoing investments with very dubious returns. Financing that is getting hard; it's a bad investment. Which is why a lot of countries are pretty far done decommissioning their coal capacity.
- DennisP 2y ago
  Yeah if we did something like this for real, we should make a more realistic estimate of how much of a return the plant owners are really likely to get, instead of just arbitrarily multiplying their investment by two. But while coal is declining, it's still spewing large amounts of CO2 and probably will for some time yet. It's doing better in areas outside the US, where it doesn't have to compete with such cheap natural gas. We could also apply this plan to natural gas, which is doing better economically, accounts for a lot of CO2, and has a warming impact as bad as coal if you take methane leaks into account. I wonder what the cost per ton CO2e would be for that.
clayhacks 2y ago
Why should the investors be getting that much of a return? The whole premise of why investments gain value is that there is a risk associated with it. The risk didn’t pay off, try not getting in the planet killing business
- DennisP 2y ago
  The problem is that the risk is still paying off. The coal plants continue to run, and it's not that easy getting the political support to shut them down before the economics make it happen anyway.

jillesvangurp 2y ago

The fallacy of the cost argument here is that it fails to take into account the cost and economics of operating a coal plant. Coal energy is simply too expensive. Any time wind/solar pushes energy prices down, coal plants are operating at a loss. Shutting down and starting up coal plants is expensive too. A lot of the reduction in coal plant capacity is not driven by environmental concerns but by economics. This is investors cutting their losses. The cost of continuing to operate these plants is higher than the cost of just getting rid of them. Keeping these plants going requires ongoing investments with very dubious returns. Financing that is getting hard; it's a bad investment. Which is why a lot of countries are pretty far done decommissioning their coal capacity.

DennisP 2y ago
Yeah if we did something like this for real, we should make a more realistic estimate of how much of a return the plant owners are really likely to get, instead of just arbitrarily multiplying their investment by two. But while coal is declining, it's still spewing large amounts of CO2 and probably will for some time yet. It's doing better in areas outside the US, where it doesn't have to compete with such cheap natural gas. We could also apply this plan to natural gas, which is doing better economically, accounts for a lot of CO2, and has a warming impact as bad as coal if you take methane leaks into account. I wonder what the cost per ton CO2e would be for that.

clayhacks 2y ago

Why should the investors be getting that much of a return? The whole premise of why investments gain value is that there is a risk associated with it. The risk didn’t pay off, try not getting in the planet killing business

DennisP 2y ago
The problem is that the risk is still paying off. The coal plants continue to run, and it's not that easy getting the political support to shut them down before the economics make it happen anyway.