Constructing Carbon Abatement Cost Curves

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Authors: Gunther Glenk, Rebecca Meier, Stefan J. Reichelstein
Cited by: 1
References: 94

Abstract

ABSTRACT Companies across industries face increasing pressure to assess the costs of decarbonizing their operations. This paper develops a generic model for constructing abatement cost curves in connection with carbon dioxide emissions. The resulting abatement cost curves provide a planning tool for companies seeking to project their decarbonization pathways and to determine optimal abatement levels in response to environmental regulations such as carbon pricing. We calibrate our model in the context of European cement producers that are required to obtain emission permits under the European Emissions Trading System. We find that a price of €85 per ton of carbon dioxide, as observed on average in 2023, incentivizes firms to reduce their annual direct emissions by about one-third relative to the status quo. Yet, this incentive increases sharply when prices rise above the benchmark of €100 per ton of carbon dioxide. Data Availability: Data used in this study are referenced in the paper and the Appendix. Data underlying the plots are provided in a supplemental material file Constructing Abatement Cost Curves - Supplementary Data.xlsx. Additional information is available upon request to the first and third authors. JEL Classifications: M41; M48; Q54; Q56.

Fields of Study & Subjects

Climate Change Policy and Economics Energy Efficiency and Management Capital Investment and Risk Analysis

Publication details

Journal / source
The Accounting Review
Publisher
American Accounting Association
Volume
101
Issue
3
Pages
223–255
Publication date
4 February 2026
Language
EN