Aleksander Śniegocki and Maciej Bukowski on the hidden bill for coal

Coal prices are plummeting, yet mining costs are not decreasing. As a result, mines are standing on the brink. Politicians, pressured by trade unions are still attempting to buy time, instead of looking for solutions. But the time has run out already.

The assistance for Kazimierz-Juliusz coal mine is just a fraction of public funds received by coal mining sector. Economists Maciej Bukowski and Aleksander Śniegocki from Wise think tank have calculated in their report titled “The Hidden Bill for Coal” that cumulative support for coal mining and energy has cost taxpayers 170 bn PLN (5.9 bn annually) over the period 1990-2012. The numbers include primarily subsidies and cancellation of liabilities to the public sector, as well as subsidies for miners’ pensions and benefits.

Subsidies for coal mining often take an indirect form, difficult to distinguish, even though their cost is borne by the entire society. Only when we include them, we will have a complete picture of costs associated with coal mining – Aleksander Śniegocki says.

Reliable economic analysis would recommend adding these figures to mines’ financial statements and checking if they would be able to restructure themselves far enough to break even.

Public support for coal is justified with the need to ensure energy security. Coal is relatively cheap and available in different parts of the world. If we were to generate energy from that resource and rely on imports, we wouldn’t be dependent on supplies from a single state – Śniegocki poins out.

The authors of the report suggest that a push for renewable energy sources (RES) would be advantageous if one has the goal of ensuring energy security for Poland in mind. Such sources are also supported with public funds but technological progress allows for cheaper and cheaper energy generation using RES, thereby making the support smaller with each year.

Full article available on the (in polish).