Don Dears, blogger at Power For USA, writes about how putting a price on carbon distorts all economic calculations wherever the carbon price is used in the U.S.1. The higher the price on carbon, the greater the distortion.
There is no question, using accepted accounting practices, that electricity generated using coal is less expensive than electricity generated using wind, but, by assigning a price of $15 per ton of CO2 emissions, the EIA has established that electricity from wind costs the same as from coal.
Now the administration has determined that the price of carbon should be $36 per ton.
Using this new price, electricity from wind will be cheaper than electricity generated by coal — a complete distortion of economic reality.
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