MACC exercises

The marginal abatement cost curves depicted in Figure 5.1 can be derived from top-down or bottom-up approaches. Bottom-up engineering-based MACCs use detailed technology-rich models modelling abatement potential and costs for individual technologies and measures. These do not consider wider macro-economic effects of measure implementation in aggregate. They are particularly useful for the assessment of options at a sectoral level; e.g. agriculture and land-use. The alternative MACC approach that dominates the abatement cost literature for other sectors, such as energy, can use a top-down approach to assess the economy-wide effects of mitigation policy options. These capture macro-economic and market feedbacks, but tend to have less detail on specific technological options. They are particularly useful in informing on cross-sectoral and economy-wide effects. Note that there is a merging of the two domains, either through integrating models (e.g. as in the EU studies which combine a suite of models and link the outputs) or through hybrid models, for example where top-down models incorporate technological options, or bottom-up models incorporate macroeconomic aspects (e.g. MARKAL-Macro).

Agricultural abatement cost curves have been estimated at various scales (see Bosello et al., 2007). A more top-down perspective is provided Perez et al. (2003), Marginal abatement cost curves have been estimated on a member-state basis by Perez et al. (2003), using the CAPRI modelling system. Perez et al. provide a regional assessment of the impacts of an EU-wide 10% reduction of total agricultural emissions. Following a similar approach, Perez and Britz (2003) and Perez et al. (2004) examine the implementation of a carbon credit system in EU agriculture, and the issue of transaction costs associated with inter-regional permit trading. Deybe and Fallot (2003) use more combined modelling, as do McCarl and Schneider (2001), who provide a comprehensive assessment of GHG abatement costs in US agriculture (see also Schneider and McCarl, 2003). De Cara and Jayet (1999; 2000) investigate abatement costs in French agriculture. In addition to N2O emissions from the use of synthetic fertilizers and CH4 emissions from enteric fermentation, the authors account for the possibility of carbon sequestration in agricultural soils and explore the conversion of set-aside land into forests. De Cara et al. (2005) move closer to a bottom-up approach in developing a linear programme model for European agriculture and deriving a marginal abatement cost curve for different levels of an emissions tax.

On the whole, because of the more technology-rich, bottom-up MACC approach, it is most illustrative of the potential range of mitigation methods. In their most aggregated form, global bottom-up MACCs suggest considerable potential for agricultural budget (McKinsey & Company, 2009). Inevitably, as agricultural emissions come under increasing regulatory scrutiny, this global potential has to be translated into actual country or producer-specific information on how mitigations can fit inside an economically efficient budget. Such an approach has recently been undertaken in the United Kingdom under the auspices of the recently formed Climate Change Committee (CCC).

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