Application of limiting marginal abatement costs in optimised strategies to reduce acidification and eutrophication in Europe: Illustrations using the Abatement Strategies Assessment Model, ASAM

The Convention on Long-Range Transboundary Air Pollution has led to the setting up of international protocols to reduce emissions of oxides of sulphur and nitrogen, ammonia, and volatile organic compounds (VOCs). Policy makers have made use of optimised abatement strategies derived by integrated assessment models (IAMs) which cost-effectively reduce acidification, eutrophication and tropospheric ozone. IAMs use information on costs of potential emission abatement options in individual countries. This paper explores the implications of limiting the abatement options in IAMs to those with moderate marginal costs. Three methods of applying this constraint to the optimisation are described. All methods indicate a loss of cost-effectiveness, this being most severe when marginal costs are constrained and environmental constraints are not compromised. However, when the overall investment level is capped and the strategy re-optimised taking into account marginal cost limitation whilst allowing violation of the original environmental targets, the loss of cost-effectiveness is less severe. For all three methods, significant changes occur in patterns of country expenditures and environmental protection, which tends to decrease significantly in those areas most difficult to protect. However, the re-optimisation method does provide the opportunity for "compensating" improvements to be achieved in other areas which are easier to protect. The choice of marginal cost limits strongly affects the extent and nature of these changes, as does the nature of the original optimised strategy.