Chapter 4 of 8

Ways to cut

Every tonne you cut lowers what you owe. Some cuts are cheap, some even pay for themselves.

Carbonado

Carbon atom, four bonds · your guide to the market

There are two ways to close a 35,000 tonne shortfall: emit less, or buy allowances. First, emitting less.

The plant has three options. Efficient lighting and waste heat recovery cut 10,000 tonnes and save $4 a tonne. A fuel switch cuts 15,000 tonnes at $8 a tonne. Swapping some clinker for slag cuts 20,000 tonnes at $18 a tonne.

Line them up from cheapest to dearest and you get a marginal abatement cost curve, or MAC curve. It is the most useful picture in this whole story.

Each step is one option: its width is the tonnes it cuts, its height is the cost per tonne. Steps below zero save money.

Remember this

A MAC curve tells you what each extra tonne of cutting costs. Start at the left and work right.

In the game: These are the cards under "Ways to cut". Each one shows tonnes and cost per tonne.

Go deeper

Marginal Abatement Cost Curves

How to read a MAC curve and use it to make better trading decisions.

Negative-Cost Abatement

Emissions reductions that save money, but firms don't always adopt them.

Randomized MAC Curves

Abatement costs drawn at random from realistic ranges, so every game plays differently.