Wind versus coal: Comparing the local economic impacts of energy resource development in Appalachia

Abstract

Two energy development scenarios were compared for the Coal River Mountain in Raleigh County, West Virginia: (1) mountaintop mining (MTM) of coal, and (2) wind energy plus underground mining of coal. Economic impact computations over the life of each energy development scenario were made on a county basis for output of goods and services, the number of jobs created, and local earnings. Externality costs were assigned monetary values for coal mining and subtracted from earnings. Premature mortality within the general population due to additional coal mining accounted for 96% of these external cost computations. The results showed that economic output over the life of each scenario was twice as high for MTM mining as wind energy plus underground coal mining. Over the short term, employment and earnings were higher for MTM mining, but towards the end of the scenario, cumulative employment and earnings became higher under scenario (2). When local externality costs were subtracted from local earnings, MTM coal production had an overall negative net social impact on the citizens of Raleigh County. The external costs of MTM coal production provide an explanation of the existence of a “resource curse” and the conflicting results of output versus income provide insights into why coal-producing counties are underdeveloped.