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

Adrien Vogt-Schilb and Stephane Hallegatte

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.

Keywords: optimal timing; inertia; sectoral policies; dynamic efficiency (search for similar items in EconPapers)
Date: 2013-03-06
Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-00626261v3
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Related works:
Working Paper: Marginal Abatement Cost Curves and the Optimal Timing of Mitigation Measures (2013)
Working Paper: When Starting with the Most Expensive Option Makes Sense On Marginal Abatement Cost Curves and Optimal Abatement Pathways (2013)
Working Paper: When starting with the most expensive option makes sense: use and misuse of marginal abatement cost curves (2011)
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