Marginal Abatement Cost Curve (MACC)

A Marginal Abatement Cost Curve, usually abbreviated MACC, graphically shows the cost or savings associated with reducing an additional unit of greenhouse gas emissions through a given measure, plotted against that measure's reduction potential. The underlying economic concept of marginal abatement costs dates back to the 1990s but became widely known through a curve developed in 2007 by the consultancy McKinsey for a Swedish energy utility, and has since been refined in numerous studies and corporate applications.

To build a MACC, the marginal cost per tonne of CO₂-equivalent avoided is calculated for each climate measure under consideration, for example energy efficiency improvements, electrification, fuel switching, or carbon capture technologies, and mapped against its respective reduction potential. The measures are then displayed sorted by ascending cost: measures with negative costs achieve net savings, while measures above the zero line come with additional costs.

Companies mainly use MACCs to prioritize decarbonization measures along their value chain and to base investment decisions on cost-effectiveness. At the government and sector level, MACCs also serve as a basis for designing climate policy instruments and funding programs.

The explanatory power of a MACC is nevertheless limited: it represents a static snapshot that shifts with changing technology costs, energy prices, or regulatory conditions, only partially accounts for interactions between individual measures, and largely excludes non-monetary implementation barriers such as organizational or technical constraints. A MACC should therefore be understood as a decision-support tool rather than the sole basis for a company's climate strategy.