What is meant by “internalized costs”? Internalized costs are the costs which can be accurately accounted for in our current systems. In energy production, these costs typically consist of capital costs, financing costs, operation and maintenance costs, and exploration costs. Some energy options incur these costs in various stages such as extraction, transportation and refinement. Profits and taxes are excluded wherever possible in order to isolate the pure cost of production. Internalized costs related to coal can become very low. That is one of the main reasons why coal has thus far proven itself to be the standout energy source of the 21 st century ( figure below ) despite rising prices, decades of talk about climate change and huge hype about alternatives. We will seek to better quantify these low internalized costs in this article. Internalized costs of coal The International Energy Agency has complied the cost curve […]