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When Starting with the Most Expensive Option Makes Sense On Marginal Abatement Cost Curves and Optimal Abatement Pathways
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When Starting with the Most Expensive Option Makes Sense On Marginal Abatement Cost Curves and Optimal Abatement Pathways

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  • Adrien Vogt-Schilb

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Stéphane Hallegatte

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the optimal implementation schedule of the measures listed in a Marginal Abatement Cost Curves (MACC). Costs and abating potentials of each measure, provided by a MACC, are completed with a maximum implementation speed. We find that, when coping with a carbon budget, it makes sense to implement some expensive options before exhausting the abating potential of the cheapest options. With abatement targets expressed in terms of emissions at one point in time, e.g.~reducing emissions by 20\% in 2020 and by 75\% in 2050 it can be preferable to start with the most expensive options if their potential is higher and their inertia is great. The best strategy to reach a short-term target depends on whether this target is the ultimate objective or there is a longer-term target. Using just the cheapest options to reach the 2020 target may create a carbon-intensive lock-in and make the 2050 target unreachable. Results suggest that a unique carbon price in all sectors may not be the most efficient approach. Additional sectoral policies, such as the 20\% renewable energy target in Europe, may be part of an efficient mitigation policy.

Suggested Citation

  • Adrien Vogt-Schilb & Stéphane Hallegatte, 2013. "When Starting with the Most Expensive Option Makes Sense On Marginal Abatement Cost Curves and Optimal Abatement Pathways," Working Papers hal-00626261, HAL.
    • Handle: RePEc:hal:wpaper:hal-00626261
    Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-00626261v3
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    Cited by:

    1. Lecuyer, Oskar & Quirion, Philippe, 2013. "Can uncertainty justify overlapping policy instruments to mitigate emissions?," Ecological Economics, Elsevier, vol. 93(C), pages 177-191.
    2. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    3. Saujot, Mathieu & Lefèvre, Benoit, 2016. "The next generation of urban MACCs. Reassessing the cost-effectiveness of urban mitigation options by integrating a systemic approach and social costs," Energy Policy, Elsevier, vol. 92(C), pages 124-138.
    4. Spencer, Thomas & Marcey, Celine & Colombier, Michel & Guerin, Emmanuel, 2011. "Decarbonizing the EU power sector: policy approaches in the light of current trends and long-term trajectories," MPRA Paper 35009, University Library of Munich, Germany.
    5. Adrien Vogt-Schilb & Guy Meunier & Hallegatte Stéphane, 2013. "Should marginal abatement costs differ across sectors? The effect of low-carbon capital accumulation," Post-Print hal-00829420, HAL.
    6. Adrien Vogt-Schilb & Guy Meunier & Stéphane Hallegatte, 2012. "How inertia and limited potentials affect the timing of sectoral abatements in optimal climate policy," Post-Print hal-00722574, HAL.
    7. Adrien Vogt-Schilb & Guy Meunier & Stéphane Hallegatte, 2013. "Should marginal abatement costs differ across sectors? The effect of low-carbon capital accumulation," Working Papers hal-00850682, HAL.
    8. Du, Limin & Hanley, Aoife & Wei, Chu, 2015. "Estimating the Marginal Abatement Cost Curve of CO2 Emissions in China: Provincial Panel Data Analysis," Energy Economics, Elsevier, vol. 48(C), pages 217-229.
    9. Hallegatte, Stephane & Heal, Geoffrey & Fay, Marianne & Treguer, David, 2011. "From growth to green growth -- a framework," Policy Research Working Paper Series 5872, The World Bank.
    10. Schell, Kristen R. & Claro, João & Fischbeck, Paul, 2015. "Geographic attribution of an electricity system renewable energy target: Local economic, social and environmental tradeoffs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 884-902.
    11. Larry Lohmann, 2012. "A Rejoinder to Matthew Paterson and Peter Newell," Development and Change, International Institute of Social Studies, vol. 43(5), pages 1177-1184, September.
    12. Benjamin Görlach, 2014. "Emissions Trading in the Climate Policy Mix — Understanding and Managing Interactions with other Policy Instruments," Energy & Environment, , vol. 25(3-4), pages 733-749, April.
    13. Eory, Vera, 2015. "Evaluating the use of marginal abatement cost curves applied to greenhouse gas abatement in agriculture," Working Papers 199777, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    14. repec:hal:journl:hal-00850680 is not listed on IDEAS

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    More about this item

    Keywords

    optimal timing; inertia; sectoral policies; dynamic efficiency;
    All these keywords.

    JEL classification:

    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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