Marginal cost of abatement

Updated: Aug 20, 2021

The marginal loss in profits from avoiding the last unit of pollution or the marginal cost of achieving a certain pollution target given some level of output. When a pollutant has several sources, each with a different marginal abatement cost curve, the efficient amount of pollution requires equalizing the marginal cost of abatement across sources. This can be achieved, for example, by using market-based instruments, such as emissions charges and tradable permits. See also abatement cost; optimal level of pollution; pollution rights.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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