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

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dc.contributor.author
Vogt-Schilb, Adrien
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dc.contributor.author
Hallegatte, Stephane
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dc.date.accessioned
2012-03-19T18:04:43Z
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dc.date.available
2012-03-19T18:04:43Z
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dc.date.issued
2011-09-01
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dc.identifier.uri
http://hdl.handle.net/10986/3567
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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.
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dc.language
English
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dc.relation.ispartofseries
Policy Research working paper ; no. WPS 5803
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dc.rights
Creative Commons Attribution CC BY 3.0
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dc.rights.uri
http://creativecommons.org/licenses/by/3.0/us/
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dc.subject
ABATEMENT ACTIVITIES
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dc.subject
ABATEMENT COSTS
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dc.subject
ABATEMENT LEVEL
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dc.subject
ABATEMENT MEASURES
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dc.subject
ABATEMENT OPTION
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dc.subject
ABATEMENT POTENTIAL
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dc.subject
ABATEMENT STRATEGIES
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dc.subject
ABATING CLIMATE CHANGE
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dc.subject
AGGREGATE EMISSIONS
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dc.subject
AIR
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dc.subject
AIR POLLUTION
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dc.subject
AIR POLLUTION REDUCTION
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dc.subject
AMOUNT OF ABATEMENT
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dc.subject
ANNUAL EMISSION
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dc.subject
ANNUAL EMISSIONS
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dc.subject
ATMOSPHERIC CONCENTRATION
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dc.subject
AUTO INDUSTRY
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dc.subject
BASELINE EMISSIONS
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dc.subject
CAPITAL STOCKS
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dc.subject
CAPITAL TURNOVER
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dc.subject
CARBON
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dc.subject
CARBON BUDGET
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dc.subject
CARBON EMISSIONS
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dc.subject
CARBON PRICE
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dc.subject
CARBON PRICES
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dc.subject
CLEAN TRANSPORTATION
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dc.subject
CLIMATE
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dc.subject
CLIMATE CHANGE
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dc.subject
CLIMATE DAMAGES
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dc.subject
CLIMATE OBJECTIVES
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dc.subject
CLIMATE POLICIES
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dc.subject
CLIMATE POLICY
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dc.subject
CLIMATE RESPONSE
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dc.subject
CLIMATIC CHANGE
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dc.subject
CO
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dc.subject
CO2
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dc.subject
COMBUSTION
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dc.subject
CONCENTRATIONS
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dc.subject
CUMULATIVE EMISSIONS
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dc.subject
DEMAND CURVE
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dc.subject
DISTRIBUTIONAL IMPACTS
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dc.subject
ECOLOGICAL ECONOMICS
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dc.subject
ECONOMIC SECTORS
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dc.subject
ELECTRIC POWER
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dc.subject
ELECTRIC POWER SYSTEMS
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dc.subject
ELECTRIC VEHICLES
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dc.subject
ELECTRICITY
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dc.subject
EMISSION
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dc.subject
EMISSION ABATEMENT
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dc.subject
EMISSION BASELINE
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dc.subject
EMISSION CONSTRAINT
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dc.subject
EMISSION REDUCTIONS
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dc.subject
EMISSION TARGET
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dc.subject
EMISSION TARGETS
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dc.subject
EMISSIONS
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dc.subject
EMISSIONS ABATEMENT
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dc.subject
EMISSIONS PATHWAYS
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dc.subject
EMISSIONS TARGETS
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dc.subject
ENERGY ECONOMICS
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dc.subject
ENERGY INFRASTRUCTURE
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dc.subject
ENERGY POLICY
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dc.subject
ENERGY PRICES
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dc.subject
ENERGY SECURITY
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dc.subject
ENERGY SOURCES
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dc.subject
ENGINES
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dc.subject
ENVIRONMENTAL ECONOMICS
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dc.subject
ENVIRONMENTAL MANAGEMENT
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dc.subject
ENVIRONMENTAL POLICIES
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dc.subject
ENVIRONMENTAL POLICY
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dc.subject
EXOGENOUS CONSTRAINT
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dc.subject
FUEL
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dc.subject
FUEL ECONOMY
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dc.subject
GAS EMISSION
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dc.subject
GHG
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dc.subject
GLOBAL WARMING
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dc.subject
GREENHOUSE
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dc.subject
GREENHOUSE GAS
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dc.subject
GREENHOUSE GAS EMISSIONS
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dc.subject
GREENHOUSE GASES
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dc.subject
GREENHOUSE-GAS
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dc.subject
INVESTMENT DECISIONS
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dc.subject
LOW-CARBON
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dc.subject
MARGINAL ABATEMENT
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dc.subject
MARGINAL ABATEMENT COST
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dc.subject
MARGINAL COST
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dc.subject
MARGINAL COST OF ABATEMENT
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dc.subject
MARKET FAILURES
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dc.subject
POLICY ANALYSIS
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dc.subject
POLICY IMPLICATIONS
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dc.subject
POLLUTION ABATEMENT
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dc.subject
POWER GENERATION
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dc.subject
POWER PLANTS
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dc.subject
PP
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dc.subject
PRESENT COST
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dc.subject
PRESENT VALUE
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dc.subject
PRICE SIGNAL
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REDUCTION IN EMISSIONS
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dc.subject
RENEWABLE ENERGIES
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dc.subject
RENEWABLE ENERGY
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dc.subject
RESTRICTIONS
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dc.subject
SHADOW PRICE
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dc.subject
SUM OF EMISSIONS
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dc.subject
SUPPLY CURVE
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dc.subject
SUSTAINABLE DEVELOPMENT
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dc.subject
SUSTAINABLE ENERGY
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dc.subject
TRADABLE EMISSIONS
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dc.subject
TRANSACTION COSTS
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dc.subject
VEHICLE
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dc.subject
WASTE
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dc.subject
WASTE RECYCLING
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dc.subject
WORLD ENERGY
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dc.title
When Starting with the Most Expensive Option Makes Sense : Use and Misuse of Marginal Abatement Cost Curves
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okr.identifier.externaldocumentum
000158349_20110921094422
en_US
okr.identifier.internaldocumentum
15100918
en_US
okr.volume
1 of 1
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okr.date.disclosure
2011-09-01
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okr.topic
Transport
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okr.region.administrative
The World Region
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okr.region.administrative
The World Region
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okr.identifier.report
WPS5803
en_US
okr.identifier.doi
10.1596/1813-9450-5803
en_US
okr.unit
Development Research Group (DECRG)
en_US
okr.doctype
Publications & Research :: Policy Research Working Paper
en_US
dc.rights.holder
World Bank
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okr.globalpractice
Transport and ICT
en_US
okr.googlescholar.linkpresent
yes

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