The marginal abatement cost curve (MAC) summarises our estimate of the realistic volume and costs of opportunities to reduce GHG emissions.
Each box on the curve represents a different opportunity to reduce greenhouse gas emissions. The width of each box represents the emissions reduction potential that opportunity can deliver in 2020 compared to business-as-usual. And the height of each box represents the average net cost of abating one tonne of CO2e (carbon dioxide equivalent) through that activity.
The graph is ordered left to right from the lowest cost to the highest cost opportunities. Those opportunities that appear below the the horizontal axis offer the potential for financial savings even after the upfront costs of capturing them have been factored in. Opportunities that appear above the horizontal axis are expected to come at a net cost.
The MACC includes only the lowest cost opportunities required to achieve a 25% reduction in Australia's emissions below 2000 levels by 2020. It excludes opportunities that require a significant change to the business mix of our economy, or changes to our lifestyles, as well as opportunities with a high degree of speculation or technological uncertainty.