Coal is dead? Pretty much.

Coal is dead? Pretty much.

For all their imperfections, markets generally do know how to price a pretty broad spectrum of goods and services (nature not so much.) So when a substantial and integral player of the US private sector–railroads–decides that coal is dead, it probably is. Keep in mind that North American railroads, including CSX, have made quite a bit of money hauling coal around over the years–it’s largely why Warren Buffett bought Burlington Northern, in fact. And if there’s an industry that has to rely on taking the long view, it’s this one.

There has been considerable anxiety over coal, not just in the US but pretty much everywhere. China and India still build coal plants, but it’s clear they are both moving away from this as soon as they can. Parts of Northern Europe are still grappling with many of the same issues that the coal heartland of the US is dealing with–particularly the loss of jobs. The fact that renewables now account for more jobs in the US┬áthan coal is starting to seep through, however, and the more generous safety net found in northern Europe has allowed those governments a bit more time ┬áto deal with these issues. They all know where this is headed.

Which doesn’t mean it will happen tomorrow. What it does mean is that Trump was making it up, or at least in part–coal jobs are just not coming back. (He was right on some of the broader job insecurity issues, though, something Democrats still haven’t figured out.) But it’s pretty much baked in at this point. Before (and even after) Trump pulled the US from the Paris climate Agreement there was a whole lot of handwringing over what the implications of that might be, with considerable consternation over whether or not the deal could fall apart. Fortunately, it has since become clear that the head of one NGO was correct in his initial assessment–“Who cares?” The economics are what is driving this now–the cost of renewables has come down faster and more extensively than anyone was predicting even four years ago. States and major cities in the US have already indicated that they remain committed to Paris Agreement targets, and indeed there has been speculation that the US will meet these targets anyway even if it’s no longer a signatory. The UK recently reached a point where no electricity whatsoever was being generated by coal, and the nation’s largest power supplier has indicated that its future is coal free. It may not be an easy transition for some economies, but it’s under way.

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