
Buy Coal: the best way for concerned billionaires to fight global warming - larsiusprime
http://www.theatlantic.com/technology/archive/2015/10/every-climate-concerned-billionaire-should-do-this-to-save-the-world/413020/?single_page=true
======
kbrosnan
By raising the price of coal will allow for seams of coal that are less
economically viable to be mined. These unviable seams are likely more
environmentally damaging to mine.

I had a family member that owned property in WV. They looked into the mineral
rights for the property. The seam below the property would be difficult to
mine due to a near by river. To access the seam the water would need to be
diverted. With a high enough price for coal then these sorts of seams become
mineable.

~~~
adventured
Indeed. His plan would be massively damaging environmentally. It would
encourage a huge increase in exploration for new deposits, and it would
subsidize the worst types of mines.

The craziest aspect of it, is the assumption that you could pull a meaningful
fraction of known mines off-line to accomplish the end goal of seizing up the
coal market (essentially crashing it, such that it can't recover).

Here's what would actually happen: Gates & Co. buy up 10% of mines (at a huge
$ cost), the price of coal rises say 50%, increasing the profitability of the
other 90% of the industry. The other 90% then invests those gains into more
output, more exploration, and they bring on-line what were formerly less
profitable deposits (Gates & Co. will not be able to buy all of those, the
planet is a big place, and there's an extraordinary amount of coal).

You would have to buy a truly massive number of mines, in an extremely short
amount of time, to accomplish the plan. The moment you start trying to buy up
mines, the price of each of them will rise, so you'd have to do it impossibly
fast.

There's no scenario you can walk through in which it's a feasible plan. Not
even close.

~~~
subnaught
If the price of coal rises 50%, a whole host of non-coal alternatives suddenly
become economically feasible.

So yes, entrenched actors (i.e. coal companies) will react to a rise in the
price of coal by mining for more coal. However, many other actors will be
incentivized to innovate and develop new sources of energy.

~~~
adventured
We've seen coal go up in price by more than 50%, and it didn't hammer the
industry. For example, global coal prices basically doubled from 2003-2007.
Coal consumption did not plunge during that time, China kept buying more of it
at higher prices (coal at 2x the current prices, is still a cheap energy
source if you don't properly force in environmental costs). It wasn't until
fracking made huge amounts of natural gas available, that the US coal industry
began to sink (in tandem with the Obama Admin targeting coal).

More expensive coal can help speed the process, I certainly agree with that.
The question is, can you buy enough coal mines around the world to crash the
coal industry in that respect, and out-pace the amount of new coal supply
other miners can bring to the market seeking higher profits. I seriously doubt
it, I'd argue there's far too much coal.

Politically you'd have to basically use the Obama Admin tactics, globally, to
hit the coal industry, while also removing as many mines as possible. It's an
incredibly expensive, risky proposition (and good luck getting everyone to
sign on to it) - when we'd be far better off continuing to improve alt energy,
and building nuclear plants. China for example isn't going to chop their own
legs off to placate climate concerns, they're going to keep using coal until
they can gradually diversify to other sources like nuclear, wind and solar.

------
ChrisLomont
This fails basic economic checks:

First, most billionaires don't just have billions in cash laying around usable
to buy things. To get that, they'd have to sell off their companies, which
usually lowers the value, so the cash to purchase needs to come from others
willing to put billions of cash into purchasing these companies. The economic
loss from this step would be huge.

Next, how much of the coal supply can they affect?

The US mines about a billion tons a year of coal, and has done so for many
years, with value about 50/ton, making this around 50 billion a year in
produced value. Presumably the places we mine coal has much left (many places
put our coal supply at about 400 years worth).

This puts the value of the US coal around 20 trillion (ignoring a few factors
like present value, etc., but this is around the total value). To purchase the
land right from owners would cost somewhere around this amount, give or take
an order of magnitude.

So the sheer number of billionaires needing to liquidate their companies,
sucking the capital out of circulation, just to purchase land they will never
extract any value from, makes this approach a non-starter. It just would not
make much dent, if any, since closing a few mines will not reduce demand;
others would likely step up production.

This money would likely be much better used to invest in new energy research
to wean us off coal in the long run.

~~~
migsvult
"First, most billionaires don't just have billions in cash laying around
usable to buy things. ... The economic loss from this step would be huge."

There would be no economic loss. In real terms, the companies that the
billionaires are selling are just as valuable. The sellers might be big enough
to cause the paper value to go down temporarily, but it would only hurt the
sellers themselves. And obviously, in nominal terms the cash would enter right
back into the economy once the coal was purchased. So there would be near-zero
negative impact to the overall economy from the asset sales.

"This puts the value of the US coal around 20 trillion (ignoring a few factors
like present value, etc., but this is around the total value). To purchase the
land right from owners would cost somewhere around this amount, give or take
an order of magnitude."

It's hard to get exact numbers, but the total value of US coal is many many
times higher than the value of just the mineral rights. The legal right to
mine $50 worth of coal is obviously worth way, way less than $50. In other
words, you can wipe out a huge amount of coal usage with smartly bought
mineral rights, especially, like the story alludes to, if you buy them in such
a way as to be inconvinient to everyone around you.

I think the basic idea is sound. The main problem would be that such a
solution would be profoundly regressive. Western billionaires literally
plunging poor people into darkness. It's probably not a bad plan B if an
international political solution fails and things get very dire.

~~~
ChrisLomont
> There would be no economic loss.

Taking cash from the economy, which is a productive asset, useful for
investment, and purchasing land which you plan to do nothing with, is most
definitely an economic loss. There is no question about this step.

>It's hard to get exact numbers

and

>I think the basic idea is sound

So give us an estimate. Mine is _orders of magnitude_ above what billionaires
could affect. It's vastly more than the difference between the gap between
value of coal versus mineral rights. I produced a first estimate. Hand waving
without giving a more refined estimate does not make it go away.

Another factor is to slow down production today one has to buy more than
mineral rights - one has to buy working mines, possibly related
infrastructure/equipment/contracts if the mine owner (or other
interested/entwined parties) have investment that goes to waste if the mine
closes, etc. So the above, merely estimating the coal, while a simple
estimate, may be close to actual costs involved to purchasing the coal mining
industry out from under itself.

You also ignore the fact I stated that as places get purchased, since this
does not change demand, so other places will simply produce more or more
places will become coal mines.

The billionaire plan, even at its most perfect execution, is unlikely to
affect the overall production much at all.

~~~
migsvult
> Taking cash from the economy, which is a productive asset, useful for
> investment, and purchasing land which you plan to do nothing with, is most
> definitely an economic loss. There is no question about this step.

No man. The cash doesn't evaporate. It goes to the sellers of the rights, who
then plug it right back into the economy. They may even go right back and
purchase that same stock! If it makes it clearer, try to think of the coal
rights as a bond with zero interest rate. Obviously, people trading the bond
around doesn't destroy value.

> Give us an estimate.

I'm not sure your 20 trillion dollar estimate is very relevant. Most folks see
the next 30-40 years as the key phase we need to get right, after which the
switch to renewable will be more or less complete. In other words, your usage
of 400 years of coal WAAAAAY overstates the size of the problem. But yeah sure
I'll throw some numbers up.

If you assume mineral rights are 5% of total cost (if you buy them
intelligently), and that you can rustle up $5B in cash, and that in the next
30 years you have a gradual slowdown of coal usage anyways, then the scheme
cuts between 10 and 20% of US coal production. Not too shabby. Now, I admit my
numbers are soft and optimistic, but it's by no means "orders of magnitude"
below what it needs to be.

> Another factor is to slow down production today one has to buy more than
> mineral rights

I see no reason why this is the case. According to the article the gov't owns
most of the rights, and the whole idea is to make it easy for private actors
to buy just the rights.

> You also ignore the fact I stated that as places get purchased, since this
> does not change demand, so other places will simply produce more or more
> places will become coal mines.

Well yeah, but at higher cost. Producers are forced to use less optimal sites,
and to outbid each other. This lowers overall production as coal is made less
competitive than gas/oil/renewables. That's the whole point.

------
epistasis
On the face of it, without having any knowledge of the amount of coal out
there or the cost of extraction for various amounts of reserves, this seems
like it could be feasible. I say that because of the ways to keep this
potential carbon dioxide out of the atmosphere, there are three points of
intervention:

1) buy it and prevent it from ever being burned (cheaper than the coal itself)

2) capture it as it comes out of the smokestack. Estimates I've heard of this
are ~$0.06/kWh, which is pretty much the same cost as the electricity, so this
is more expensive than buying the fuel before it's been mined

3) extract the CO2 from the air or oceans. Engineered, electricity-based
processes for this will likely cost 3x-6x as much energy as the coal generated
originally. Biostorage (forrestation, etc..) may or may not be cheaper than
this, depending on how effective we can make CO2 sinks.

With coal CO2, prevention really is the way to go.

Of course, if we had a carbon market where fossil-fuel CO2 emitters had to pay
the cost of CO2 extraction, or sequester the carbon themselves, the market
would allow quick and efficient solutions, letting innovators profit as they
improve CO2 management.

Coal/fossil fuels/CO2 emissions are not moral evils that must be stopped at
all costs, they must just be stopped at their true market costs.

------
adventured
> Frost thinks we should pay the organizations which own underground coal
> deposits—specifically, the U.S. government—for the right to never mine it.

This is a wildly impractical idea. It's so bad, it hardly deserves any serious
consideration.

There is far more coal still in the ground - to go with deposits that are
either expected to be there or have not been found yet - than that which we
already have operating mines for. If, for example, you remove US coal from the
global supply, the only thing it'll accomplish is to lift prices for the rest
of the world's miners (bringing their operations back to high levels of
profitability, whereas today the global coal industry is in terrible shape),
and encourage the creation of new mines all over the planet. In the process of
restricting supply, it'll lift coal back to highly profitable as an industry,
and it'll fund the creation of new mines.

Unless the plan is to buy all the land on earth of course, so you can
guarantee all those untapped coal deposits never come on-line. I'm sure it
would only cost a mere few dozen trillion dollars to make a serious dent.

Matt Frost's plan should be renamed: The Coal Industry Restoration Act

~~~
arcseco
When the price of coal rises other forms of fuel become more cost competitive.
The net result should be a reduction in coal production as utilities switch to
other fuels.

~~~
iamsohungry
Yes, but there are other ways to raise the price of coal which don't involve
bribing coal companies to stop destroying the world. They're destroying the
world, how about _they_ pay for it? You could put a massive property tax on
coal mining rights, a massive tax on profits from coal, and/or a massive sales
tax on coal. Any of those would achieve the same result, but instead of
rewarding sociopathic corporations that are literally destroying the world,
they'd put that money in public coffers which could be used, for example, to
fund renewable energy.

I really don't think we need to bribe coal companies to stop killing us.

EDIT: And don't even think of playing the "but if we tax them they'll pass
that cost on to consumers" card. Driving up the cost of coal by buying mines
will also result in them passing that cost on to consumers. All costs are
always passed on to consumers: billionaires are billionaires because they're
adept at getting other people to pay for things. At least if the money is
going into taxes, it can be passed back to the consumers it was taken from in
the form of public programs.

~~~
gsibble
You really don't seem to have a good grasp on free market economics.

~~~
iamsohungry
Either present a counterargument or GTFO. Ad-hominem attacks do not contribute
to the conversation.

------
iamsohungry
This is stupid. Why are we playing these economic games? These people are
literally destroying the environment for all of us, which is already resulting
in deaths and billions of dollars of destruction and will likely result in far
worse. We don't need to pay them to stop killing us, we need to make laws
making what they are doing illegal.

The problem isn't that we don't have solutions to global warming. We are still
subsidizing fossil fuel energy far more than renewable energy: one easy,
obvious step would be to _stop doing that_ but we haven't. The reason we
haven't done simple things like that is that it isn't profitable for
billionaires. I'm quite tired of the conversation about global warming
centering around "finding solutions" as if we don't have solutions. The
problem isn't a lack of solutions, it's that amoral corporations control
environmental policy and don't care if we all die if it makes them a profit.

~~~
em3rgent0rdr
While you may have strong opinions, the reality of politics however is not as
simple as you might like it to be. The article presents a solution that
doesn't require significant political change by instead relying on private
property and market forces.

~~~
mdpopescu
Er... what? The article suggested bribing the government to forbid other
companies from mining the coal. Which part of that sounded like market forces
to you?

~~~
em3rgent0rdr
that is a good point. For the sake of argument regarding this article, there
is a presumption that the government owns the mineral rights to lands west of
the Mississippi: "But west of the Mississippi, things work different.
Especially in Montana and the Mountain West, the government mostly holds
mineral rights."

But if one does not accept the government's property claim on those mineral
rights, then I suppose the act of paying the government to forbid other
companies from mining there could be considered a bribe.

The article is presenting a solution that works in the current state of the
world: presuming the current state of property rights and legal structure.

------
rch
Instead of just attempting to influence the market price, how about targeting
coal beds that have significant carbon sequestration potential first?

[http://www.tandfonline.com/doi/abs/10.1080/10473289.2003.104...](http://www.tandfonline.com/doi/abs/10.1080/10473289.2003.10466206)

------
tomjen3
If you want to solve global warming invest in nuclear power and make it so
that I can drive to any gas station and have a new battery put in my car that
can take me as long as a tank of gas, in a car that isn't far more expensive
than my current car.

Then maybe we can talk.

------
Hytosys
Despite the fundamental economic problems with this proposition listed
elsewhere here, I'm just floored by the political implications:

There is hardly such a thing as a "climate-concerned billionaire." Mostly
there just exists the "capital-concerned billionaire." The writer is enamored
with the capitalist class, but there have been no signs in the history of ever
that it systemically works in the interest of the massive people or its
planet.

Who is the author really trying to appeal to? Are they still trying to
convince the affected people that we can depend on the unaffected people to be
saviors? Where the hell is the Atlantic article titled "Destroy Capitalism:
the only way for billions of concerned people to save themselves and their
environment"?

~~~
stickfigure
My roommate recently became the Director of Technology of
[https://nextgenclimate.org/](https://nextgenclimate.org/)

It's an environmental advocacy organization funded by Tom Steyer. So, there
certainly is such a thing as a "climate-concerned billionaire".

~~~
Hytosys
My keyword was "hardly," as in the capitalist _class_ does not care about the
climate. My intention was not to demonize individuals and generalize all
people into two types (those who are rich and hate Earth and those who are
poor and love Earth). My intention was to give a realistic analysis on the
mechanism of capitalism, which is something this author failed to recognize
altogether.

By the way, tell your roommate that "AMERICA DOESN'T IGNORE PROBLEMS" is not
readable on whatever devices that the 600,000 US homeless people are using.

------
aaron695
This fails a basic sanity check.

We need X amount of energy per year and increasing.

Energy = money = health and well being, so this has to continue and quicker.
Morally the worlds poor deserve this.

If you take away cheap energy people will spend more money and effort on more
expensive energy sources.

This might include more environmental solutions but will mostly be dirtier
fossil fuels.

No one likes energy dependence and cheap cleaner solutions are what almost
everyone wants. It'll happen as technology matures enough to allow it to
happen. Full steam ahead is the best and moral solution. As is pointed out in
other comments the cost alone to even make a dent is conveniently not
mentioned anywhere.

It'd be trillions to do nothing but keep something in the ground. We need to
move forward.

------
d4nt
The idea of just keeping the carbon in the ground makes sense. But it would be
simpler (and require a lot less capital) to just impose punitive taxes on coal
mines and coal imports.

The mining companies pass the cost on, renewables become more attractive, no
complicated capping and trading system necessary.

The only problem I can see with this is that the WTO probably forbids it. But
one would hope that everyone involved could get together and make an exception
for the sake of saving millions of lives.

------
petra
OK. interesting idea. But whenever i look - i don't seem to find the missing
piece- how much would it cost and what would get from that cost .I even looked
at the original paper by harstad :

[http://www.kellogg.northwestern.edu/faculty/harstad/htm/depo...](http://www.kellogg.northwestern.edu/faculty/harstad/htm/deposits.pdf)

And none is found. So maybe it's one of those ideas who is only good in theory
?

------
BorisMelnik
The hardest part for this is going to be convincing the first set of
billionaires to take money out of (gold, x commodity) and putting it into
coal. Gates will probably have to be a guinea pig and convince some of his
other investor friends to do the same, and everyone else will follow suit.

That is of course, if you believe global warming is a thing.

~~~
em3rgent0rdr
well at least it requires these global-warming-concerned billionaires to put
their money where their mouth is, instead of by enforcing their beliefs on
others via the political process.

~~~
wj
How do they enforce their beliefs via the political process? Last time I
checked (in the U.S. at least) you needed to be elected to office in order to
pass policy and I don't believe there are that many billionaires in elected
office.

If you are suggesting they manipulate it with donations then remember that
your money spends just as well in Washington as theirs does. And don't forget
that global-warming-denier billionaires make campaign contributions as well.

~~~
em3rgent0rdr
>> "How do they enforce their beliefs via the political process?"

By electing and lobbying politicians who make laws.

>> "Last time I checked (in the U.S. at least) you needed to be elected to
office in order to pass policy and I don't believe there are that many
billionaires in elected office."

Billionaires don't actually have to be in office in order to enforce their
beliefs via the political process.

>> "remember that your money spends just as well in Washington as theirs does"

Using money to implement laws via politics is rent-seeking behavior. But
although my money may spend just as well in Washington as their money does,
the key argument this article is making is: market methods can be more
effective than political methods for limiting greenhouse gas emissions.

~~~
wj
Billionaires have one vote just like you and I do.

I believe market methods are more effective at most things but environmental
protection is not one of them due to the tragedy of the commons.

If course I could be wrong.

------
lujim
Or take the same amount of money and convert/build plants to use natural gas.
It creates half as much CO2 per unit of energy created and we have more of it
than we know what to do with right now. Instead of burying all that money in a
coal mine we could get some new infrastructure, some jobs, and less CO2.

~~~
em3rgent0rdr
but that would decrease price of coal, which would lead to other nations -
particularly developing nations like china - to increase their consumption,
thereby offsetting most of the ecological benefit from converting/building the
natural gas plants.

------
diogenescynic
I've often wondered why there wasn't a charity fund that would just buy up
portions of rainforests to turn into nature preserves, similar to the way
Norway paid Brazil to protect the Amazon:
www.reuters.com/article/2015/09/15/us-climatechange-amazon-norway-
idUSKCN0RF1P520150915

~~~
wj
Probably a lot of reasons behind it (and maybe charities like that do exist --
there are a lot of charities out there) but some countries do not allow
foreign ownership of land. I believe Mexico you can only get a 99 year lease
on land when you "buy" there. Another reason might be distrust of government.
Some countries with rain forests do not have the most stable governments (do
they seem to be less stable the closer to the equator you get?) and it would
be a shame to buy up a lot of land only to have it nationalized or laws not
enforced (owners aren't here so who is to stop me from logging it?) when
government changes.

------
a3n
Lots of economic reasons in these threads why this technically feasible (if
disruptive) solution can't come to be.

Maybe a better use of these billionaire saviours time and money would be to
invest in solar and other renewable energy sources, as well as water
desalination (the connection being high energy cost).

Be a sun baron.

------
pavement
You know where coal would be awesome? The moon.

[https://en.wikipedia.org/wiki/Underground_coal_gasification](https://en.wikipedia.org/wiki/Underground_coal_gasification)

Now all we need are space-based oxidants. Maybe we could capture a large-ish
comet or two.

------
Gravityloss
I think articles and philosophies like this are symptomatic of the resignation
of a democratic civil society. Humankind is supposed to be begging a few
eccentric billionaires to do these things for everyone - instead of making
enlightened laws and just doing them.

------
WalterBright
This is the same thing as trying to corner the market by buying up the supply.
It doesn't work. The supply will increase faster than anyone can buy it.

------
robotcookies
Buying up coal would raise the price of electricity. That's essentially a flat
tax. You punish the poor of the world who use minimal amounts.

~~~
melling
Isn't that what people claim is happening when you make people pay for more
expensive renewable energy?

~~~
adventured
Renewable energy is paid for by rich people, so long as you don't force
economic adoption to occur too fast (eg shifting from coal to solar/wind).
There's a reasonable economic adoption curve, if you stay on it, then the rich
primarily subsidize the shift - if you move too fast, and to the extent you do
so, you punish the poor too much.

The rich pay for the shift through their higher taxes (government R&D,
subsidies, etc), funding research at top tier universities, owning large
corporations that do R&D or implementation (eg Musk / SolarCity, or Walton /
FirstSolar and so on), buying big batteries for their homes, being first to
adopt large scale home solar, building massive solar plants or wind farms (or
being customers ala Buffett / Berkshire / Mid-American). This is similar to
the way the rich subsidize most new technology until it becomes economical.

------
mrfusion
Wouldn't buying lumber and burying it also work?

