{"id":21639,"date":"2021-08-31T05:50:19","date_gmt":"2021-08-31T10:50:19","guid":{"rendered":"http:\/\/blogs.edf.org\/climate411\/?p=21639"},"modified":"2022-01-28T16:19:25","modified_gmt":"2022-01-28T21:19:25","slug":"a-revamped-cost-curve-showcases-the-biggest-carbon-cutting-opportunities","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/climate411\/2021\/08\/31\/a-revamped-cost-curve-showcases-the-biggest-carbon-cutting-opportunities\/","title":{"rendered":"A revamped cost curve showcases the biggest carbon-cutting opportunities"},"content":{"rendered":"

President Biden has raised the bar for U.S. climate ambition, setting targets to cut economy-wide emissions 50-52% by 2030 and achieve net-zero by 2050. As the administration, federal lawmakers and state and local leaders work to make these goals a reality with strong climate policies and investments \u2014 including in climate-focused infrastructure and reconciliation packages being negotiated in Congress \u2014 they are faced with many questions. What are the cheapest ways to cut carbon right now? How will a particular policy affect emissions? How much should we be investing in new clean technologies that are not widely available yet?<\/em><\/p>\n

A new and improved \u2018cost curve\u2019 tool<\/a> developed by EDF and Evolved Energy Research shows that the electricity and transportation sectors offer the most impactful carbon-cutting opportunities at the lowest cost right now — with potential to get us nearly halfway to net-zero emissions from energy and industry by 2050. <\/strong>This tool, which offers a new take on what is known as a Marginal Abatement Cost (MAC) curve, gives policymakers an economic roadmap to net-zero emissions and beyond by revealing greater insights into the costs, impact and optimal sequencing of different carbon-cutting actions.<\/p>\n

<\/p>\n

Quick backgrounder: What is a MAC curve?<\/strong><\/h3>\n

MAC curves can be useful tools to inform climate policy priorities because they highlight the relative costs <\/strong>and impacts<\/strong> of different strategies to reduce carbon pollution. However, traditional MAC curves, such as the one popularized by McKinsey & Company more than a decade ago, have noted limitations<\/a>.<\/p>\n

Traditional MAC curves typically show the total annual emissions that could be abated (or reduced) by each measure or technology (width of bars along the x-axis), ordered by the increasing marginal cost that it would take for each measure to reduce a ton of emissions (height of bars along the y-axis).<\/p>\n

\"Traditional<\/a>
Traditional MAC curve by McKinsey and Company.<\/figcaption><\/figure>\n

But this version doesn\u2019t explore an increasingly important part of the story.<\/em> It treats technologies as static, independent measures in a fixed marketplace. But in fact, today\u2019s energy systems are undergoing a significant transition that is not straightforward. The most efficient sequence of deployment depends upon several other things besides static marginal cost, including how measures in the energy system can influence one another and the time required to develop different technologies and their markets.<\/p>\n

EDF and Evolved\u2019s MAC 2.0 curve<\/strong><\/h3>\n

Recognizing this complexity, our MAC 2.0 curve offers three important improvements over traditional models:<\/p>\n

    \n
  1. It captures how a carbon-cutting measure may influence other measures and other sectors. <\/strong>For example, the more that clean electricity resources are available, the higher the emissions reduction potential of EVs.<\/li>\n
  2. It shows how the deployment levels of each technology may impact their marginal abatement cost, <\/strong>rather than assuming costs are constant. For example, while solar PV costs are near-zero in many areas of the country today and their deployment will achieve even greater economies of scale, it may also require supporting resources (e.g., batteries, new transmission lines) that bump up relative costs.<\/li>\n
  3. It expands the array of possible measures to cut carbon<\/strong>. Certain measures, like electric boilers, which are used to heat homes, would be excluded from traditional MAC curves because deploying them tends to increase emissions while the grid remains largely powered by fossil fuels \u2014 even though they can decrease emissions once our electricity sector becomes decarbonized.<\/li>\n<\/ol>\n

    Our MAC 2.0 curve (shown below) shows the annual carbon pollution reductions from different measures across energy and industry by 2050 that become accessible at different marginal abatement costs, and it emphasizes the order of deployment that should take place to minimize overall costs.<\/p>\n

    \"MAC<\/a>
    How to read the curve:<\/strong> The highest point on the curve represents emissions from the baseline scenario, and the lowest point shows how, if all measures are deployed in coordination, we could effectively lower CO2 emissions from industry and energy use to net-negative levels.<\/figcaption><\/figure>\n

    Key takeaways<\/strong><\/h3>\n

    Policymakers should deploy cost-effective measures right now:<\/strong><\/p>\n