When Starting with the Most Expensive Option Makes Sense : Use and Misuse of Marginal Abatement Cost Curves

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Vogt-Schilb, Adrien
dc.contributor.author
Hallegatte, Stephane
dc.date.accessioned
2012-03-19T18:04:43Z
dc.date.available
2012-03-19T18:04:43Z
dc.date.issued
2011-09-01
dc.description.abstract
This article investigates the use of expert-based Marginal Abatement Cost Curves (MACC) to design abatement strategies. It shows that introducing inertia, in the form of the "cost in time" of available options, changes significantly the message from MACCs. With an abatement objective in cumulative emissions (e.g., emitting less than 200 GtCO2 in the 2000-2050 period), it makes sense to implement some of the more expensive options before the potential of the cheapest ones has been exhausted. With abatement targets expressed in terms of emissions at one point in time (e.g., reducing emissions by 20 percent in 2020), it can even be preferable to start with the implementation of the most expensive options if their potential is high and their inertia significant. Also, the best strategy to reach a short-term target is different depending on whether this target is the ultimate objective or there is a longer-term target. The best way to achieve Europe's goal of 20 percent reduction in emissions by 2020 is different if this objective is the ultimate objective or if it is only a milestone in a trajectory toward a 75 percent reduction in 2050. The cheapest options may be sufficient to reach the 2020 target but could create a carbon-intensive lock-in and preclude deeper emission reductions by 2050. These results show that in a world without perfect foresight and perfect credibility of the long-term carbon-price signal, a unique carbon price in all sectors is not the most efficient approach. Sectoral objectives, such as Europe's 20 percent renewable energy target in Europe, fuel-economy standards in the auto industry, or changes in urban planning, building norms and infrastructure design are a critical part of an efficient mitigation policy.
en
dc.identifier.uri
http://hdl.handle.net/10986/3567
dc.language
English
dc.relation.ispartofseries
Policy Research working paper ; no. WPS 5803
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
ABATEMENT ACTIVITIES
dc.subject
ABATEMENT COSTS
dc.subject
ABATEMENT LEVEL
dc.subject
ABATEMENT MEASURES
dc.subject
ABATEMENT OPTION
dc.subject
ABATEMENT POTENTIAL
dc.subject
ABATEMENT STRATEGIES
dc.subject
ABATING CLIMATE CHANGE
dc.subject
AGGREGATE EMISSIONS
dc.subject
AIR
dc.subject
AIR POLLUTION
dc.subject
AIR POLLUTION REDUCTION
dc.subject
AMOUNT OF ABATEMENT
dc.subject
ANNUAL EMISSION
dc.subject
ANNUAL EMISSIONS
dc.subject
ATMOSPHERIC CONCENTRATION
dc.subject
AUTO INDUSTRY
dc.subject
BASELINE EMISSIONS
dc.subject
CAPITAL STOCKS
dc.subject
CAPITAL TURNOVER
dc.subject
CARBON
dc.subject
CARBON BUDGET
dc.subject
CARBON EMISSIONS
dc.subject
CARBON PRICE
dc.subject
CARBON PRICES
dc.subject
CLEAN TRANSPORTATION
dc.subject
CLIMATE
dc.subject
CLIMATE CHANGE
dc.subject
CLIMATE DAMAGES
dc.subject
CLIMATE OBJECTIVES
dc.subject
CLIMATE POLICIES
dc.subject
CLIMATE POLICY
dc.subject
CLIMATE RESPONSE
dc.subject
CLIMATIC CHANGE
dc.subject
CO
dc.subject
CO2
dc.subject
COMBUSTION
dc.subject
CONCENTRATIONS
dc.subject
CUMULATIVE EMISSIONS
dc.subject
DEMAND CURVE
dc.subject
DISTRIBUTIONAL IMPACTS
dc.subject
ECOLOGICAL ECONOMICS
dc.subject
ECONOMIC SECTORS
dc.subject
ELECTRIC POWER
dc.subject
ELECTRIC POWER SYSTEMS
dc.subject
ELECTRIC VEHICLES
dc.subject
ELECTRICITY
dc.subject
EMISSION
dc.subject
EMISSION ABATEMENT
dc.subject
EMISSION BASELINE
dc.subject
EMISSION CONSTRAINT
dc.subject
EMISSION REDUCTIONS
dc.subject
EMISSION TARGET
dc.subject
EMISSION TARGETS
dc.subject
EMISSIONS
dc.subject
EMISSIONS ABATEMENT
dc.subject
EMISSIONS PATHWAYS
dc.subject
EMISSIONS TARGETS
dc.subject
ENERGY ECONOMICS
dc.subject
ENERGY INFRASTRUCTURE
dc.subject
ENERGY POLICY
dc.subject
ENERGY PRICES
dc.subject
ENERGY SECURITY
dc.subject
ENERGY SOURCES
dc.subject
ENGINES
dc.subject
ENVIRONMENTAL ECONOMICS
dc.subject
ENVIRONMENTAL MANAGEMENT
dc.subject
ENVIRONMENTAL POLICIES
dc.subject
ENVIRONMENTAL POLICY
dc.subject
EXOGENOUS CONSTRAINT
dc.subject
FUEL
dc.subject
FUEL ECONOMY
dc.subject
GAS EMISSION
dc.subject
GHG
dc.subject
GLOBAL WARMING
dc.subject
GREENHOUSE
dc.subject
GREENHOUSE GAS
dc.subject
GREENHOUSE GAS EMISSIONS
dc.subject
GREENHOUSE GASES
dc.subject
GREENHOUSE-GAS
dc.subject
INVESTMENT DECISIONS
dc.subject
LOW-CARBON
dc.subject
MARGINAL ABATEMENT
dc.subject
MARGINAL ABATEMENT COST
dc.subject
MARGINAL COST
dc.subject
MARGINAL COST OF ABATEMENT
dc.subject
MARKET FAILURES
dc.subject
POLICY ANALYSIS
dc.subject
POLICY IMPLICATIONS
dc.subject
POLLUTION ABATEMENT
dc.subject
POWER GENERATION
dc.subject
POWER PLANTS
dc.subject
PP
dc.subject
PRESENT COST
dc.subject
PRESENT VALUE
dc.subject
PRICE SIGNAL
dc.subject
REDUCTION IN EMISSIONS
dc.subject
RENEWABLE ENERGIES
dc.subject
RENEWABLE ENERGY
dc.subject
RESTRICTIONS
dc.subject
SHADOW PRICE
dc.subject
SUM OF EMISSIONS
dc.subject
SUPPLY CURVE
dc.subject
SUSTAINABLE DEVELOPMENT
dc.subject
SUSTAINABLE ENERGY
dc.subject
TRADABLE EMISSIONS
dc.subject
TRANSACTION COSTS
dc.subject
VEHICLE
dc.subject
WASTE
dc.subject
WASTE RECYCLING
dc.subject
WORLD ENERGY
dc.title
When Starting with the Most Expensive Option Makes Sense : Use and Misuse of Marginal Abatement Cost Curves
en
okr.date.disclosure
2011-09-01
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110921094422
okr.globalpractice
Transport and ICT
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-5803
okr.identifier.externaldocumentum
000158349_20110921094422
okr.identifier.internaldocumentum
15100918
okr.identifier.report
WPS5803
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/09/21/000158349_20110921094422/Rendered/PDF/WPS5803.pdf
en
okr.region.administrative
The World Region
okr.region.administrative
The World Region
okr.topic
Transport
okr.unit
Development Research Group (DECRG)
okr.volume
1 of 1

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