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The failure of marginal abatement cost curves in optimising a transition to a low carbon energy supply

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  • Ward, D.J.

Abstract

One of the tools used to optimise actions in reducing the carbon intensity of the economy is to use Marginal Abatement Cost (MAC) curves. Whilst these are known to be imperfect they are widely used to prioritise actions and often in a way that is incorrect. In particular, whilst their use for measures which have positive costs and a net reduction in carbon emissions can correctly rank the measures for effectiveness, use for ranking measures which have a net negative cost, including a wide range of energy efficiency measures, is entirely inappropriate and leads to perverse and incorrect outcomes. As a result, many assessments of low carbon actions are fundamentally flawed in their ranking of effectiveness and action is needed to overcome this and allow an optimum outcome. An alternative approach is suggested here.

Suggested Citation

  • Ward, D.J., 2014. "The failure of marginal abatement cost curves in optimising a transition to a low carbon energy supply," Energy Policy, Elsevier, vol. 73(C), pages 820-822.
    • Handle: RePEc:eee:enepol:v:73:y:2014:i:c:p:820-822
    DOI: 10.1016/j.enpol.2014.03.008
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    References listed on IDEAS

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    1. Fabian Kesicki & Paul Ekins, 2012. "Marginal abatement cost curves: a call for caution," Climate Policy, Taylor & Francis Journals, vol. 12(2), pages 219-236, March.
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    Cited by:

    1. Halkos, George & Tzeremes, Nickolaos & Kourtzidis, Stavros, 2014. "Abating CO2 emissions in the Greek energy and industry sectors," MPRA Paper 60807, University Library of Munich, Germany.
    2. Chappin, E.J.L. & Soana, M. & Arensman, C.E.C. & Swart, F., 2020. "The Y factor for Climate Change abatement – A method to rank options beyond abatement costs," Energy Policy, Elsevier, vol. 147(C).
    3. Robert Miehe & Matthias Finkbeiner & Alexander Sauer & Thomas Bauernhansl, 2022. "A System Thinking Normative Approach towards Integrating the Environment into Value-Added Accounting—Paving the Way from Carbon to Environmental Neutrality," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    4. Yuan, Jun & Ng, Szu Hui, 2017. "Emission reduction measures ranking under uncertainty," Applied Energy, Elsevier, vol. 188(C), pages 270-279.
    5. Yuan, Jun & Ng, Szu Hui & Sou, Weng Sut, 2016. "Uncertainty quantification of CO2 emission reduction for maritime shipping," Energy Policy, Elsevier, vol. 88(C), pages 113-130.
    6. Hu, Hongtao & Yuan, Jun & Nian, Victor, 2019. "Development of a multi-objective decision-making method to evaluate correlated decarbonization measures under uncertainty – The example of international shipping," Transport Policy, Elsevier, vol. 82(C), pages 148-157.
    7. Timmons, David & Konstantinidis, Charalampos & Shapiro, Andrew M. & Wilson, Alex, 2016. "Decarbonizing residential building energy: A cost-effective approach," Energy Policy, Elsevier, vol. 92(C), pages 382-392.
    8. Levihn, Fabian, 2016. "On the problem of optimizing through least cost per unit, when costs are negative: Implications for cost curves and the definition of economic efficiency," Energy, Elsevier, vol. 114(C), pages 1155-1163.
    9. Blanco, Christian C. & Caro, Felipe & Corbett, Charles J., 2020. "Do carbon abatement opportunities become less profitable over time? A global firm-level perspective using CDP data," Energy Policy, Elsevier, vol. 138(C).

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