Where in the World is it Cheapest to Cut Carbon Emissions? Ranking Countries by Total and Marginal Cost of Abatement

Stern, David I.; Pezzey, John C. V.; Lambie, N. Ross

Where in the World is it Cheapest to Cut Carbon Emissions? Ranking Countries by Total and Marginal Cost of Abatement

Autores

Stern, David I.

Pezzey, John C. V.

Lambie, N. Ross

Descripción

Countries with low marginal costs of abating carbon emissions may have high total costs, and vice versa, for a given climate mitigation policy. This may help to explain different countries' policy stances on climate mitigation. We hypothesize that, under a common percentage cut in emissions intensity relative to business as usual (BAU), countries with higher BAU emissions intensities have lower marginal abatement costs, but total costs relative to output will be similar across countries; and under a common carbon price, relative total costs are higher in emissions-intensive countries. Using the results of the 22nd Energy Modeling Forum, we estimate marginal abatement cost curves for the US, EU, China, and India, which we use to estimate marginal and total costs of abatement under a number of policy options currently under international debate. The results of this analysis provide support for our hypotheses.