EXTERNAL COSTS AND FREE MARKETS

1 May 1996

The external costs of electricity generation have been identified and quantified in a series of studies over the past decade or so. Though the range of estimates for the absolute cost of a kilowatt hour from differing energy sources is still wide, governments are now able to devise fiscal policies to ensure the "polluter pays." Competitive, deregulated markets will be good for wind as long as hidden subsidies to conventional technologies are acknowledged -- and external costs taken into account.

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