The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Marginal Abatement Costs

  • Ross McKitrick
Reference work entry


The marginal abatement cost curve (MAC) shows, for every emissions level, a firm or industry’s marginal cost (foregone profits) of reducing emissions, or equivalently, its marginal willingness to pay for the right to emit one additional unit of pollution. The term ‘abatement’ here denotes a unit reduction in emissions, as distinct from units of specific abating inputs, such as smokestack scrubbers. The MAC is not invariant to the form of the emissions control policy. The aggregate MAC for an industry is only well defined in cases where the policy achieves cost efficiency by equalising MAC levels across all emitters.


Abatement Efficiency Emissions Environmental policy 

JEL Classifications

Q50 Q52 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Ross McKitrick
    • 1
  1. 1.