Dynamics of Carbon Abatement in the Second Generation Model
Behavior of the Second Generation Model (SGM), with respect to changes in carbon prices, can be summarized using marginal abatement cost curves. Marginal abatement costs vary over time, as capital stocks adjust to a new set of prices, and across countries, depending in part on the mix of fuels in the existing energy system. This paper documents the production structure in SGM, marginal abatement cost curves derived from SGM with constant-carbon-price experiments, an application to several Energy Modeling Forum scenarios, and a methodology for including carbon capture and disposal in SGM. This methodology for carbon capture from electricity generation, and its impact on marginal abatement costs, is demonstrated using the United States module of SGM.