What is a Marginal Abatement Cost Curve?
Marginal abatement cost curves (MACC) present measures to reduce GHG emissions in the order of their cost-effectiveness. It is a straightforward tool for presenting carbon emissions abatement options relative to a baseline (typically a business-as-usual (BAU) pathway). A MAC curve permits an easy to read visualization of various mitigation options or measures organized by a single, understandable metric: economic cost of emissions abatement.
MAC curves are broken into discrete ‘blocks’. Each block represents an individual or a set of similar carbon abatement measures. For each block (or measure), the width indicates the amount of potential carbon emissions abatement (tCO2) while the height estimates the marginal cost of the carbon emissions abatement (€/tCO2). Typically the blocks are ordered such that the lowest cost options, which may represent net cost savings (negative €/tCO2), are shown first on the left, with subsequent higher cost options proceeding to the right.
Why develop a Carbon Abatement Curve?
MAC curves are useful for framing carbon emissions abatement options, providing a clear and accessible tool that orders measures on a simple economic metric (€/tCO2). This allows measures from various sectors (e.g. transport and energy) to be compared on equivalent terms, serving as an initial lens of where abatement opportunities are potentially the largest and most cost effective.
Therefore, MAC curves can be powerful for robust initial framing and identification of options to further evaluate. In this sense, MAC curves provide a great conversation starter from which deeper discussion and analysis can evolve with consideration of additional important dimensions and suitable policy options for unlocking the potential in each block.
Despite the appealing simplicity of a MAC curve, useful interpretation requires a great deal of care and expertise. MAC curves alone are not sufficient to base policy decisions on, and should be used in combination with other carbon calculation models to ensure accuracy in decision making.
Ecomatters support in developing emissions Abatement Cost Curves
To visualise the potential emission reductions in an organisation, we support organisations in constructing an abatement curve. To do that, we start by making, together with your organisation, the key methodological choices for setting up a MACC that is relevant to you. We do this based on the following choices:
- Whether your organisation takes a social or business perspective;
- Whether and how the abatement measures interact;
- Whether your organisation chooses a frozen technology emission baseline is or a baseline that takes an autonomous efficiency improvement into account; And
- Which measures are included in the analysis.
The next step is identifying and quantifying energy efficiency improvements for different types of scenarios: business as usual (BAU), economic and ambitious. After this we define the abatement potential and cost per action, which leads to generating a curve showing the relationship between marginal abatement cost and emission abatement.
The MACC can be shown in a histogram or a curve diagram:
- Histogram: The histogram assesses the cost and reduction potential of each single abatement measure. Each bar represents a single mitigation option.
- Curve diagram: The curve indicates the cost, usually in €/t CO2-eq, associated with the last unit (the marginal cost) of emission abatement. The curve enables you to analyse the cost of the last abated unit of CO2 for a defined abatement level, while the area under the curve gives the total abatement costs.
In both cases, moving along the curve from left to right, the cost-effectiveness of low carbon options worsens, since each ton of CO2e mitigated becomes more expensive. Some options may reduce emissions and save money, other options may reduce more emissions, but incur a positive cost.