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About 40% of all coal mined in the United States is extracted from lands owned by the federal government, under leases managed by the U.S. Department of the Interior (DOI). Burning that coal accounts for 13% of U.S. energy-related greenhouse gas (GHG) emissions ( 1 ). With the largest and lowest-cost reserves in the United States, federal coal alone—estimated at nearly 10% of the world's known reserves—has potential to contribute substantially to atmospheric CO2 concentrations ( 2 ). In response to calls for reform, DOI has issued a moratorium on new leases while it develops a Programmatic Environmental Impact Statement to guide the first major reform of the program since 1982. We review existing knowledge of key issues relevant to reform, highlighting the social costs of coal extraction, the extent of substitution away from federal coal induced by raising additional leasing revenue, the lack of competition in the leasing auctions, and the incentives inherent in the current leasing program structure. We then turn to critical areas of research that can be done in the near term and would contribute to more informed debate and policy development.

In June, the Obama Administration unveiled its proposal for a Clean Power Plan, which it estimates would reduce carbon dioxide (CO2) emissions from existing U.S. power plants 30% below 2005 levels by 2030 (see the chart). Power plant emissions have declined substantially since 2005, so the plan is seeking reductions of about 18% from current levels. Electricity generation accounts for about 40% of U.S. CO2 emissions.