What Is a Marginal Abatement Cost Curve, and How Do We Use One to Prioritise Emissions Reduction?

Once an organisation has a complete GHG emissions inventory, the next question is almost always the hardest one: where do we actually spend our first dollar of decarbonisation budget? A marginal abatement cost curve, usually abbreviated to MACC, is the tool built specifically to answer that question with evidence rather than instinct, and it is one of the most useful, and most underused, outputs of a well-built inventory.

What a MACC actually shows

A marginal abatement cost curve plots every available emissions reduction measure available to an organisation against two dimensions: how much it costs to abate each tonne of CO2 equivalent (on the vertical axis), and how much total abatement potential that measure offers (on the horizontal axis, as the width of each bar). Measures are ordered from cheapest, sometimes genuinely cost-negative, through to most expensive, creating a step chart that reads, quite literally, left to right as your most economically sensible sequence of action.

The “marginal” in marginal abatement cost curve refers to the cost of abating one additional tonne of emissions through a specific measure, not the average cost across your whole decarbonisation programme. This distinction matters because it is exactly what makes the tool useful for sequencing: it tells you the cost of the next tonne you reduce, not just the average cost of your programme overall.

Why some measures sit below the zero line

One of the most useful, and often surprising, features of a properly built MACC is that some measures appear with a negative cost, meaning they save money over their lifetime rather than costing anything at all. LED lighting retrofits, building management system tuning, and some fleet efficiency measures frequently fall into this category: the upfront capital cost is more than recovered through reduced energy spend before the measure’s useful life ends. A MACC makes this visible in a way a simple list of initiatives rarely does, and it is often the single most persuasive input into getting early decarbonisation investment approved, because it demonstrates that meaningful action does not have to wait for a business case built on values alone.

Building one from your own inventory data

A MACC is only as good as the emissions inventory and cost data behind it. Building one credibly involves:

Starting from your Scope 1 and 2 inventory, and material Scope 3 categories. The measures on your curve need to map back to actual emissions sources identified in your GHG inventory, not a generic industry list of decarbonisation ideas that may not reflect your actual footprint.

Costing each measure on a lifecycle basis. This means capital cost, ongoing operating cost or saving, and the measure’s expected useful life, converted into a cost per tonne of CO2 equivalent abated over that lifetime, using a consistent discount rate across all measures so they can genuinely be compared.

Being honest about abatement potential, not just theoretical capacity. A measure’s true abatement potential depends on realistic uptake, implementation timelines, and interaction effects with other measures (switching to renewable electricity, for example, reduces the abatement value of subsequent energy efficiency measures, since there is less grid-intensity emissions left to save).

Revisiting it regularly. A MACC built once and filed away loses its value quickly, since technology costs, energy prices, and your own emissions profile all shift over time. Organisations serious about using this tool treat it as a living input to annual planning, not a one-off analysis.

How it actually gets used in a net zero strategy

A MACC does not replace target setting or strategy, but it is what turns an ambitious net zero target into an actual sequenced investment plan. It helps a board or executive team see, at a glance, which measures deliver the most abatement per dollar, which measures are effectively free (or better than free), and where the organisation’s harder, more expensive abatement challenges genuinely sit, often deep in Scope 3 or in process emissions with no mature low-cost technology solution yet available. This last point matters for credibility: a MACC that shows only cheap, easy wins and stops there is not a complete decarbonisation plan. Its real value is in making the hard, expensive parts of the curve visible too, so a net zero strategy can be honest about what still needs solving, rather than only claiming credit for the easy half.