Gambling with Coal

The document asserts that new conventional coal plants are imprudent investments due to the certainty of future U.S. federal CO2 regulations, likely in the form of a cap-and-trade system. It argues that such regulations will significantly raise the cost of coal-fired electricity, making energy efficiency and renewables more competitive. The report urges state regulators to protect ratepayers by either denying the construction of new coal plants or requiring that shareholders, rather than customers, bear the financial risk of future carbon compliance costs.

• Federal legislation limiting global warming pollution from power plants in the United States is considered virtually inevitable and likely to be adopted within five years.
• Future CO2 regulations are expected to utilize a "cap-and-trade" system, and there is strong evidence that these systems will rely on auctioning allowances rather than granting them for free to utilities.
• Coal plants are the primary target for CO2 limits because they are the largest individual source of U.S. CO2 emissions, producing approximately one-third of the nation's total emissions.
• Mid-range projections for CO2 allowance prices could increase the cost of electricity from an average new coal plant by approximately 40% over its operating lifetime.
• When factoring in carbon risk, energy efficiency and renewable energy (such as wind) are generally more cost-effective investments than new conventional coal plants.
• Retrofitting existing pulverized coal plants with CO2 capture technology is technically possible but would be prohibitively expensive, potentially increasing levelized costs by nearly 74%.
• A significant portion of the U.S. power industry, including five of the ten largest private power producers, now supports the implementation of mandatory federal CO2 limits.
• State regulators have the legal authority to protect ratepayers by refusing to allow the recovery of future CO2 compliance costs through electric rates, instead placing that risk on utility shareholders.

APA

Freese, B., & Clemmer, S. (2006). Gambling with Coal. Union of Concerned Scientists. https://www.ucs.org/sites/default/files/2019-09/gambling_with_coal_final_report_sept_06.pdf

Chicago

Freese, Barbara, and Steve Clemmer. Gambling with Coal. Union of Concerned Scientists, 2006. https://www.ucs.org/sites/default/files/2019-09/gambling_with_coal_final_report_sept_06.pdf.

Wikipedia

{{cite report |last1=Freese |first1=Barbara |last2=Clemmer |first2=Steve |title=Gambling with Coal |publisher=Union of Concerned Scientists |date=1 September 2006 |url=https://www.ucs.org/sites/default/files/2019-09/gambling_with_coal_final_report_sept_06.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{freese2006gambling, author = {Freese, Barbara and Clemmer, Steve}, title = {{Gambling with Coal}}, institution = {Union of Concerned Scientists}, year = {2006}, month = sep, url = {https://www.ucs.org/sites/default/files/2019-09/gambling_with_coal_final_report_sept_06.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }