Marginal Abatement Cost
Encyclopedia
A marginal abatement cost curve or MAC curve is a set of options available to an economy to reduce pollution. They are valuable tools in understanding emissions trading
, driving forecasts of carbon allowance prices, prioritizing investment opportunities, and shaping policy discussions.
Various economists, research organizations, and consultancies have produced MAC curves. Bloomberg New Energy Finance and McKinsey & Company
have produced economy wide analyses on greenhouse gas emissions reductions for the United States
. ICF International
produced a California specific curve following AB-32 legislation as have Sweeney and Weyant.
The Wuppertal Institute for Climate, Environment and Energy produced several marginal abatement cost curves for Germany (also called Cost Potential Curves), depending on the perspective (end-user, utilities, society).
The US Environmental Protection Agency has done work on a MAC curve for non carbon dioxide emissions such as methane, N2O, and HFCs. Enerdata and LEPII-CNRS (France) produce MAC curves with the POLES
model for the 6 Kyoto Protocol gases, these curves have been used for various public and private actors either to assess carbon policies or through the use of a carbon market analysis tool.
Typically, MAC curves cover emissions reduction opportunities across a number of sectors in an economy including power, industry, waste, buildings, transport, agriculture, and forestry.
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
, driving forecasts of carbon allowance prices, prioritizing investment opportunities, and shaping policy discussions.
Usage
For example, carbon traders use marginal abatement cost (MAC) curves to derive the supply function for modelling carbon price fundamentals. Power companies may employ MAC curves to guide their decisions about long-term capital investment strategies to select among a variety of efficiency and generation options. Economists have used MAC curves to explain the economics of interregional carbon trading, and policy-makers turn to MAC curves to show how much abatement an economy can afford and where policy should be directed to achieve the emission reductions.Various economists, research organizations, and consultancies have produced MAC curves. Bloomberg New Energy Finance and McKinsey & Company
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
have produced economy wide analyses on greenhouse gas emissions reductions for the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. ICF International
ICF International
ICF International , formerly known as ICF Consulting, is a management, technology, and policy consulting firm based in Fairfax, Virginia...
produced a California specific curve following AB-32 legislation as have Sweeney and Weyant.
The Wuppertal Institute for Climate, Environment and Energy produced several marginal abatement cost curves for Germany (also called Cost Potential Curves), depending on the perspective (end-user, utilities, society).
The US Environmental Protection Agency has done work on a MAC curve for non carbon dioxide emissions such as methane, N2O, and HFCs. Enerdata and LEPII-CNRS (France) produce MAC curves with the POLES
Poles
thumb|right|180px|The state flag of [[Poland]] as used by Polish government and diplomatic authoritiesThe Polish people, or Poles , are a nation indigenous to Poland. They are united by the Polish language, which belongs to the historical Lechitic subgroup of West Slavic languages of Central Europe...
model for the 6 Kyoto Protocol gases, these curves have been used for various public and private actors either to assess carbon policies or through the use of a carbon market analysis tool.
Typically, MAC curves cover emissions reduction opportunities across a number of sectors in an economy including power, industry, waste, buildings, transport, agriculture, and forestry.