Chapter 6 of 8
Cut or buy
Put the price on the MAC curve and the right answer draws itself.
Carbonado
Carbon atom, four bonds · your guide to the market
Say the auction clears at $12. Now lay that price across the plant's MAC curve.
The efficiency step saves money, so do it. The fuel switch costs $8, less than $12, so do it. Clinker substitution costs $18, more than $12, so skip it and buy instead.
That is 25,000 tonnes cut and 10,000 tonnes bought for $120,000. Any other mix costs more.
Carbonado says:
Remember this
Cut every tonne that costs less than the carbon price, buy the rest. When every firm does this, the market finds the cheapest cuts across all of them.
In the game: Each card under "Ways to cut" compares its cost with the auction price once there is one.