Publication

This paper examines how the marginal abatement cost curve (MACC) in one country depends on the level of abatement in the rest of the world. The authors show that there is a dependence via the link of world energy prices with the strength of the dependence influenced by factors such as trade elasticities and trade structures. They quantify the effect and find that the MACC of a region shifts with changes in the abatement level in the rest of the world and that, especially with low domestic abatement level, the MACCs can differ considerably.