Prolonging coal’s sunset: Local demand for local supply

Jonathan Eyer and Matthew Kahn

Regional Science and Urban Economics, 2020, vol. 81, issue C

Abstract: The share of U.S electricity generated by coal has fallen from nearly 50% to 33%. This transition offers social environmental benefits but spatially concentrated costs as coal miners and their local communities have suffered. Coal states have responded to shifting demand conditions by introducing incentives for local power plants to purchase coal from local mines. We document that power plants in areas with mining activity are more likely to be coal-fired and to purchase more coal from mines which they share a political boundary even after controlling for the distance from power plants to mines. While politically-motivated coal purchases do result in improved conditions in coal-mining counties in some regions of the country, these benefits are likely to be small compared to the additional carbon costs.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:81:y:2020:i:c:s0166046219303965

DOI: 10.1016/j.regsciurbeco.2019.103487

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