Global Greenhouse Gas Abatement Cost Curve presented at GMF
On May 11, GMF hosted two events for leaders in the NGO and business communities and congressional staffers, respectively, to discuss the updated (2009) version of the global greenhouse gas (GHG) abatement cost curve conducted by McKinsey & Co. The events featured Jon Wilkins, a partner at McKinsey & Co. with Jake Werksman, director of institutions & governance at the World Resources Institute (WRI) and Dr. Joseph Romm, senior fellow at the Center for American Progress as respondents.
The McKinsey abatement cost curve was originally presented in 2007, and the revised version was published in early 2009. The cost curve is a visual synthesis of its assessment of opportunities to reduce greenhouse gas emissions in order of cost.
According to the McKinsey study, there are roughly three categories of emission reductions that each cost less than $80/ton of carbon that include energy efficiency, low carbon energy supply, and reducing emissions from deforestation. The cost curve serves to counter several myths regarding the costs of climate change mitigation. For instance, many experts believe that abatement opportunities are concentrated in industrialized countries and China. However, the developing world, excluding China, represents less than 40 percent of the total 2030 abatement potential. Click here for additional conclusions. Some of the discussants cautioned that the cost curve sends a risky message to the international negotiations because it implies that developing countries should shoulder a significant amount of the burden to reduce emissions since many of the lowest cost options are located in developing countries. In fact, funding from industrialized countries to support actions to reduce emissions in developing countries is seen as a critical component of a global climate deal.
Other discussants questioned some of the assumptions behind the report, particularly the projected price of oil (McKinsey estimates $60 a barrel), which he said would be "a miracle" if it were not at least $120 a barrel by 2020. He proposed that many of the measures outlined in the cost curve were likely to be adopted if the world became serious about climate change. We are getting serious now, he thought, but by 2020 we would become "desperate" and therefore ready to do a lot more things than were currently envisaged. He was skeptical about carbon capture and sequestration, which he thought would play a much smaller role than concentrated solar power, and he thought that biomass co-firing for electricity generation was a much more likely and efficient use of biomass than its conversion into second-generation biofuels.
The full report is available for download below:
Pathways to a Low-Carbon Economy - 2000 (PDF-6.88MB)