MACC Calculator

Marginal abatement cost is the price of avoiding one additional tonne of carbon dioxide equivalent through a specific measure. In its simplest form it divides the cost of the measure by the emissions it removes, giving dollars per tonne. The more informative version used here nets lifetime operating savings against implementation cost first, then divides by cumulative emissions avoided over the project life, which is why the result can be negative. A negative marginal abatement cost means the measure pays for itself: LED relamping, variable-speed drives on pumps and fans, compressed air leak repair, and envelope sealing routinely land between minus 100 and zero dollars per tonne. Positive-cost options rise steeply, with reforestation often quoted at 5 to 20 dollars per tonne, industrial fuel switching in the tens, and post-combustion carbon capture typically 50 to 120 dollars per tonne. Plotted as a staircase with each measure's width equal to its abatement potential and its height equal to its cost per tonne, the result is the abatement cost curve, and the point where the staircase crosses a given carbon price shows how much abatement that price unlocks. The construction assumes measures are independent, which they are not: insulating a building reduces the tonnes still available to a heat pump upgrade, so summing the widths of overlapping measures overstates achievable reductions.

Cost-effectiveness ranking of pollution controls predates climate policy. Regulators applied it to sulfur dioxide and particulate abatement during the 1970s under the US Clean Air Act, comparing control technologies by dollars per ton removed. The idea that many energy measures carry negative net cost was popularized by Amory Lovins of the Rocky Mountain Institute, whose negawatt concept, argued from 1989 onward, held that saved electricity is cheaper than generated electricity. Academic cost curves for greenhouse gases appeared in the early 1990s, with work by Tim Jackson and others formalizing the ranking approach for carbon specifically. The format most people recognize came from consulting. McKinsey and Company published its global greenhouse gas abatement cost curve in 2007, with authors including Per-Anders Enkvist and Tomas Naucler, followed by a version 2.0 in 2009 covering more than 200 measures across regions and sectors. The chart became a fixture of national climate plans and corporate decarbonization roadmaps. Economists have criticized it on the grounds that negative-cost measures should already have been adopted if they were genuinely profitable, pointing instead to hidden transaction costs, split incentives between landlords and tenants, and capital rationing as the real barriers to uptake.