It’s great when governments create imaginary economies to solve an imaginary problem and then hike the social cost of the imaginary problem while burying the hike in a bunch of microwave ovens.
Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline. The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations.
The figure is meant to approximate losses from global warming such as flood damage and diminished crops. With the change, government actions that lead to cuts in emissions — anything from new mileage standards to clean-energy loans — will appear more valuable in its cost-benefit analyses. On the flip side, approvals that could lead to more carbon pollution, such as TransCanada Corp. (TRP)’s Keystone pipeline or coal-mining by companies such as Peabody Energy Corp. (BTU) on public lands, may be viewed as more costly.
You can see why Obama Inc and his Green backers love the idea of an imaginary economy based on a commodity whose value they can unilaterally set.