Those shaping America’s coal policy can learn something important about creative destruction, the process by which new technologies replace older ones through innovation, from the 2025 Nobel Prize winners in economics. Just as smartphones have overtaken flip phones and cars have displaced horses, such progress has significantly improved our daily lives.

Instead of government subsidizing or transitioning away from coal, America should let companies develop energy technologies that can freely compete with and potentially replace coal energy to power homes and businesses.

This obvious concept should be universally welcomed. If coal is reliable and affordable, it will continue to power our grid. If it is more expensive than cleaner alternatives, its share of the electricity mix will decline on its own.

This approach will end the volatile pendulum that has characterized coal policy (and energy policy as a whole) over the past decades. The same government levers used to wage war on coal, along with other fossil fuel energy sources, are then used to subsidize them when political leadership changes.

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While allocating trillion-dollar subsidies to preferred green energy industries, the Biden administration tried to eliminate coal through punitive regulations such as the requirement for coal plants to capture 90% of their carbon emissions by 2032. This impossible standard would have forced nearly all coal plants into retirement.

The Trump administration was correct to propose repealing these burdensome rules and opening 13 million acres of federal land for coal development. It went further by providing $625 million in subsidies for coal plants, and the One Big Beautiful Bill Act provided a tax subsidy for metallurgical coal.

Though the subsidies are not long-term solutions, President Trump’s actions were understandable responses to New Green Deal proponents who attempted to phase out fossil fuels while subsidizing wind and solar, destabilizing the grid. Many U.S. regions are at “elevated risk,” which means an electricity shortfall can occur in extreme conditions, according to the North American Electric Reliability Corp. Washington can put an end to this partisan battle over coal by embracing an approach rooted in creative destruction, one that is free from subsidies and excessive regulations.

Although punitive rules on coal should be repealed, reasonable regulations can play a crucial role in shaping coal policy. For instance, the Environmental Protection Agency’s 2012 Mercury and Air Toxics Standards rule protects the environment. By 2021, coal plants’ mercury emissions were about 90% lower than pre-MATS levels, along with significant reductions from other hazardous air pollutants.

Policymakers could also remove government barriers that hinder other energy sources from competing freely with coal. For example, rather than blocking permits for natural gas pipelines that deliver cleaner fuel, states could approve such projects. New York can cooperate with the Trump administration to advance the 125-mile Constitutional and 37-mile Northeast Supply Enhancement pipelines that were previously rejected. Other projects, such as transmission line expansions and power plants, should be able to advance under an efficient permitting process.

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The One Big Beautiful Bill Act rolled back many green energy tax credits, but the legislation failed to completely repeal the clean electricity credits that drive renewable deployment. Congress should complete the task of repealing all energy subsidies.

Meanwhile, competition between energy producers will determine the role of coal in the power mix. If emerging technologies such as large-scale battery systems outperform coal, its decline simply means that America has found better ways to power homes and businesses. This possible scenario may lead to job losses in the coal industry, but it also creates new opportunities in innovative energy sectors.

Coal remains an important component of our energy mix both domestically and globally. It provides 15% of total American electricity generation. Globally, coal has been the leading source of electricity production for more than 50 years. Its instrumental role in energy supply and economic progress in the past and present may not continue, but its future should be determined by competition, not government.