Marginal Abatement Cost Curves and the Optimal Timing of Mitigation Measures

24 Pages Posted: 9 Nov 2013

See all articles by Adrien Vogt-Schilb

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement

S. Hallegatte

World Bank

Date Written: November 8, 2013

Abstract

Decision makers facing abatement targets need to decide which abatement measures to implement, and in which order. Measure-explicit marginal abatement cost curves depict the cost and abating potential of available mitigation options. Using a simple intertemporal optimization model, we demonstrate why this information is not sufficient to design emission reduction strategies. Because the measures required to achieve ambitious emission reductions cannot be implemented overnight, the optimal strategy to reach a short-term target depends on longer-term targets. For instance, the best strategy to achieve European's -20% by 2020 target may be to implement some expensive, high-potential, and long-to-implement options required to meet the -75% by 2050 target. Using just the cheapest abatement options to reach the 2020 target can create a carbon intensive lock-in and make the 2050 target too expensive to reach. Designing mitigation policies requires information on the speed at which various measures to curb greenhouse gas emissions can be implemented, in addition to the information on the costs and potential of such measures provided by marginal abatement cost curves.

Keywords: Climate Change Mitigation, Dynamic Efficiency; Inertia, Sectoral Policies

JEL Classification: L98, Q48, Q54, Q58

Suggested Citation

Vogt-Schilb, Adrien and Hallegatte, Stephane, Marginal Abatement Cost Curves and the Optimal Timing of Mitigation Measures (November 8, 2013). FEEM Working Paper No. 89.2013. Available at SSRN: https://ssrn.com/abstract=2351739 or http://dx.doi.org/10.2139/ssrn.2351739

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement ( email )

France

Stephane Hallegatte (Contact Author)

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

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