Chapter 01 · Climate & transitionClimate & Greenhouse Gas Emissions
Abatement cost
Definition
The cost incurred to reduce or avoid greenhouse gas emissions, conventionally expressed per tonne of CO₂-equivalent abated. The marginal abatement cost is the cost of abating one additional tonne; plotting measures in cost order, with bar width showing abatement potential, produces a marginal abatement cost curve (MACC).
References
First MACC developed 2007; adoption by UK CCC and companies; growth from ~150 to 1,400+ levers.
MACC mechanics — bar width as reduction potential, bar height as cost per tCO₂e, discounting over measure life, negative-cost measures and uptake barriers.
SR15 finding that marginal abatement costs are ~3–4× higher in 1.5°C than 2°C pathways; caution that modelled marginal costs are not a prescribed carbon price.
Overview
What it means
Costs are usually calculated as the discounted present value of a measure over its lifetime, divided by the emissions reduced over the same period. Some measures show negative cost — they save money, typically through energy efficiency — though barriers such as split incentives and long payback periods often prevent their uptake.
How it is used
McKinsey developed the first MACC in 2007 for a Swedish utility; such curves have since been used by the UK Committee on Climate Change for net-zero roadmaps, by oil and gas companies for internal strategy, and in EU carbon-market analysis. The IPCC's 1. 5°C Special Report noted that marginal abatement costs in 1.
5°C pathways are roughly three to four times higher than in 2°C pathways — though such modelled values are not equivalent to a required real-world carbon price.
Why it matters
Abatement cost analysis directs attention to the cheapest reductions first and informs carbon pricing and investment sequencing. Its limits matter too: curves omit co-benefits, distributional effects and implementation barriers, and results are sensitive to discount rates and baseline assumptions.