Marginal Abatement Cost Analysis in Energy Systems

Marginal abatement cost analysis examines the incremental cost of reducing an additional unit of greenhouse gas emissions within energy systems. At its core is the marginal abatement cost curve (MACC), which ranks mitigation options by cost per tonne of carbon dioxide equivalent abated. These curves guide decision-makers in prioritising investments across power generation, heat supply and transport sectors. Recent methodological advances integrate dynamic interactions among technologies, finance conditions and policy instruments, yielding time-dependent cost curves that reflect learning rates, technology lifetimes and system feedbacks. By coupling MACCs with energy system optimisation models, analysts capture cross-sectoral effects, such as the interplay between renewables deployment, battery storage and demand-side measures. Such tools illuminate pathways to net-zero emissions under differing carbon price trajectories, highlighting resilient (e.g. wind, solar), tipping-point (e.g. heat electrification) and niche (e.g. advanced bioenergy) technologies. Practical applications encompass national energy strategies, city-level climate action plans and corporate decarbonisation roadmaps. Incorporating uncertainties—on fuel prices, technological performance and policy stringency—yields probabilistic cost ranges that enhance robustness. Overall, marginal abatement cost analysis has become indispensable for aligning technological potential with economic efficiency, thereby informing equitable and cost-effective transitions to a low-carbon energy future.

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Marginal Abatement Cost Analysis in Energy Systems publication trend

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Technical terms

Marginal abatement cost curve (MACC): A graphical representation ranking emission reduction measures by their incremental cost per unit of CO₂ equivalent abated.

Integrated energy system model: A computational tool that simulates supply, demand and technology interactions across power, heat and transport sectors under policy and market constraints.

Least-cost optimisation: A mathematical approach to identify the combination of technologies and fuels that minimises total system cost for a given emissions target.

Levelised cost of energy (LCOE): The average lifetime cost per unit of energy produced, used to compare generation technologies on a consistent basis.

Carbon capture and storage (CCS): A family of technologies that capture CO₂ emissions from point sources or the atmosphere, transport it and store it in geological formations.

References

1. Identifying decarbonisation opportunities using marginal abatement cost curves and energy system scenario ensembles. Applied Energy (2020).
2. Reducing household greenhouse gas emissions from space and water heating through low-carbon technology: Identifying cost-effective approaches. Energy and Buildings (2021).
3. A Sketch of Bolivia’s Potential Low-Carbon Power System Configurations. The Case of Applying Carbon Taxation and Lowering Financing Costs. Energies (2018).