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Friday, October 13, 2017

The Challenge of Phasing Out Coal: Compensating Capital but not Labor

Michael Bloomberg understands the Coase Theorem.  He has proposed to buy and then shut down some coal fired power plants.   Read Haarstad's 2012 JPE paper on this general topic of environmentalists purchasing coal and leaving it in the ground.  Note that this approach isn't a takings. The coal interests have the property right to use their coal but choose to sell this right. 

But, what about the coal miners and their communities?  Who is compensating them for giving up their life and traditions?  Can they easily transition and become "green jobs" workers?  Unfortunately, I do not think so.  Eyer and I discuss these points in this 2017 paper.  Such a "takings" from these workers is one cause of the Trump coalition.