That is not what "self-correcting" does.
Your argument does not show that it won't go up, but only that it won't go from 5% to 15% but rather find some balance at, say, 8%. Mission accomplished, coal is now at a disadvantage compared to what it was before.
> The world is awash with capital right now, money sitting around idle, looking for a place to be invested.
And considering that coal is not doing well (and thus has to offer higher rates), much of that money will be invested elsewhere. Sure, some will still be invested in coal but less than it would be if you didn't do that.
This type of argument pops up often: "but there is a small counteracting effect, so it will balance out to not do anything". No, it does not work like that.
Your argument does not show that it won't go up, but only that it won't go from 5% to 15% but rather find some balance at, say, 8%. Mission accomplished, coal is now at a disadvantage compared to what it was before.
> The world is awash with capital right now, money sitting around idle, looking for a place to be invested.
And considering that coal is not doing well (and thus has to offer higher rates), much of that money will be invested elsewhere. Sure, some will still be invested in coal but less than it would be if you didn't do that.
This type of argument pops up often: "but there is a small counteracting effect, so it will balance out to not do anything". No, it does not work like that.