Legal commitments to reduce CO 2 emissions require policy makers to find cost-efficient means to meet the obligations. Marginal abatement cost (MAC) curves have frequently been used in this context to illustrate the economics associated with climate change mitigation. A variety of approaches are used to generate MAC curves with different strengths and weaknesses, which complicates the interpretation. This paper points out the usefulness and limits of the concept of MAC curves and presents a review of the weaknesses and strengths inherent in expert-based and model-derived abatement curves. In the next step, the use of the different types of MAC curves for the assessment of policy instruments is discussed. It concludes that expert-based curves can serve as guides for nonincentive-based instruments, while model-derived curves are suitable to assess incentive-based instruments. Finally, policy makers have to be aware of the general and type-specific shortcomings of abatement cost curves in order to arrive at a balanced decision.
Kesicki, F (2010) Marginal Abatement Cost Curves for Policy Making - Model-derived versus Expert-based Curves. In: (Proceedings) 33rd IAEE International Conference. (2010)
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