kesicki mac curve - final
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Marginal abatement cost curves: a call for cautionFabian KesickiUN Climate Change Conference (SB 34) in Bonn, 7th June 2011
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This presentation is based on the report ‘Marginal Abatement Cost Curves: a Call for Caution’ written by Ekins, P., Kesicki, F. and A. Smith
A research article of the same name is forthcoming in Climate Policy.
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Concept of Marginal Abatement Cost (MAC) Curves
Policy Use of MAC curves Shortcomings MAC Curves and REDD (Reducing Emissions
from Deforestation and Forest Degradation)
OVERVIEW
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MAC CURVE CONCEPT
Residential electronics
Cars full hybrid
Residential appliances
Insulation retrofit
Efficiency improvement
Geothermal
Nuclear Cars plug-in
Offshore windOnshore wind
Solar CSPSolar PV
BiomassCoal CCS
Gas CCSElectric heat pump
Electric boiler
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POLICY USE OF MAC CURVE Many areas:
Electricity saving Air pollution Waste reduction Water availability Energy-related emissions reduction REDD
Many countries: USA, EU, UK, France, Mexico, China REDD: Congo for example
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PROBLEMS WITH CURRENT MAC CURVES Unclear assumptions Cost definition Implementation barriers Discounting Intertemporal issues Interactions / baseline emissions Behavioural aspects Ancillary benefits/costs Handling uncertainty Financial focus
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ELECTRIC HYBRID CAR EXAMPLE
Parameter Unit Petrol ICE Petrol HybridDiscount rate % 5 5Lifetime years 12 12Investment cost € 19600 22400Operating cost €/a 1670 1732Annual kilometrage km/a 14481 14481Fuel consumption l/100 km 7 5.95Petrol price €/l 1.68 1.68Emission factor kg CO2/l 2.3 2.3
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0 500 1000 1500 2000 2500 3000 3500 4000
-400
-200
0
200
400
600
800
1000
Difference in investment cost
Investment cost [€]
Ab
ate
me
nt
co
st
[€ p
er
ton
CO
2]
0% 5% 10% 15% 20% 25% 30%0
500
1000
1500
2000
2500
3000
Increase in fuel efficiency
Difference in fuel efficiency between Hybrid and ICE [%]
Ab
ate
me
nt
co
st
[€ p
er
ton
CO
2]
5 7.5 10 12.5 15 17.5 200
200
400
600
800
1000
Vehicle life time
Vehicle life time [years]
Ab
ate
me
nt
co
st
[€ p
er
ton
CO
2]
0% 5% 10% 15% 20% 25%0
200
400
600
800
1000
1200
1400
1600
Discount rate
Discount rate [%]
Ab
ate
me
nt
co
st
[€ p
er
ton
CO
2]
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MAC CURVES AND REDD
Kindermann et al. 2008
Kindermann et al. 2008
Nabuurs et al. 2007
Eliasch 2008
Grieg-Gran 2008
Blaser and Robledo 2007 Holdren 2007(Brazil only)
Stern 2007
Nauclér and Enkvist 2009
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MAC CURVES AND REDD Uncertainty concerning baseline emissions Focus on opportunity cost without
considering administration, implementation, monitoring costs
Price discrimination Potential leakage Interactions with demand for bioenergy,
timber industry
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CONCLUSIONS MAC curves: simple and useful illustration
tool; first, rough guide to abatement costs and potentials at a specific point in time
Previously outlined caveats may have been overlooked in the past
MAC curves should be applied very carefully in the REDD debate
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