The Carboniferous coal beds provided much of the fuel for power generation during the Industrial Revolution and are still of great economic importance.
The large coal deposits of the Carboniferous primarily owe their existence to two factors. The first of these is the appearance of bark-bearing trees (and in particular the evolution of the bark fiber lignin). The second is the lower sea levels that occurred during the Carboniferous as compared to the Devonian period. This allowed for the development of extensive lowland swamps and forests in North America and Europe. Based on a genetic analysis of mushroom fungi, David Hibbett and colleagues proposed that large quantities of wood were buried during this period because animals and decomposing bacteria had not yet evolved that could effectively digest the tough lignin. It is assumed that fungi that could break it down did not arise before the end of the period
, making future coal formation much more rare. The Carboniferous trees made extensive use of lignin. They had bark to wood ratios of 8 to 1, and even as high as 20 to 1. This compares to modern values less than 1 to 4. This bark, which must have been used as support as well as protection, probably had 38% to 58% lignin. Lignin is insoluble, too large to pass through cell walls, too heterogeneous for specific enzymes, and toxic, so that few organisms other than Basidiomycetes fungi can degrade it. It can not be oxidized in an atmosphere of less than 5% oxygen. It can linger in soil for thousands of years and inhibits decay of other substances. Probably the reason for its high percentages is protection from insect herbivory in a world containing very effective insect herbivores, but nothing remotely as effective as modern insectivores and probably many fewer poisons than currently. In any case coal measures could easily have made thick deposits on well drained soils as well as swamps. The extensive burial of biologically produced carbon led to a buildup of surplus oxygen in the atmosphere
; estimates place the peak oxygen content as high as 35%, compared to 21% today. This oxygen level probably increased wildfire activity, as well as resulted in insect and amphibian gigantism—creatures whose size is constrained by respiratory systems that are limited in their ability to diffuse oxygen