It's the most cost-effective way to sequester carbon short of expropriation.
Which tells us a lot of the Larry Fink's of the world are not really into the spending money to abate the release of the stuff.
Three aspects of the issue. First up, from Marginal Revolution, October 18, 2021:
Be Green: Buy a Coal Mine!
It’s time to reup the idea of buying coal mines and shuttering them. I wrote about this a few years ago based on Bard Harstad’s piece in the JPE and it came up again on twitter so I went looking for a coal mine to buy. Here’s a coal mine for sale in West Virginia for only $7.8 million! According to the ad, the mine produces 10,000 tons of coal monthly and has reserves of 8 million tons. Now here are some back of the envelope calculations.
(Warning: There may be errors since there are a lot of unit conversions. I invite someone with expertise in the industry to do a more serious analysis.)
Each ton of coal burned produces about 2.5 tons of carbon dioxide (you get more carbon dioxide since the carbon combines with oxygen). Sources: 2.86 short tons. 2.086 short tons.
It costs about $100 to sequester a ton of carbon dioxide for a long time.
Thus, 10,000 tons of coal burnt monthly produce 25,000 tons of carbon dioxide that it would cost $2.5 million a month to sequester. Or buying the mine pays for itself in reduced C02 emissions in about 3 months.
Ordinarily buying up the supply would increase supply elsewhere but coal mines are going out of business–thus no one is investing much in building new coal mines. The supply curve, therefore, is inelastic. In addition, you could buy up the right to mine in precisely those countries that are not committed to reducing coal mining. Indeed, you could buy the right to mine costly-to-exploit coal deposits–those deposits are cheap (since they are costly to exploit) and by taking them off the market you are making the supply curve even more inelastic so you aren’t encouraging much additional supply. Imagine, for example, that coal mining will be banned tomorrow. Thus, companies will be producing all-out today but that means you could reduce a lot of carbon emissions by buying the right to mine from the most expensive producers (who will sell cheap) and you won’t appreciably increase the incentive to mine. Indeed, on the margin, a higher price of energy might even do more to increase alternative sources of power like solar, especially if you buy thermal coal where there are lots of substitutes (there are fewer substitutes for coke coal.) See the Harstad paper and references in my earlier post....
....MORE, including some interesting comments from the cheap seats.
Beautiful, two months later an opportunity arises. From the natural resources editor of the Financial Times, December 21:
Who wants to buy coal? pic.twitter.com/45S37CIQSO
— Neil Hume (@humenm) December 21, 2021
However, three days earlier the Wall Street Journal had put the lie to all the nice words from the 'green' community:
