@article{Kim2025, 
author = {Yoon Ji Kim and Seung Jick Yoo},
title = {Marginal GHGs abatement cost in the Republic of Korea’s economy},
year = {2025},
journal = {Energy and Climate Management},
volume = {1},
number = {4},
pages = {9400024},
keywords = {Marginal abatement cost, carbon pricing, nested logit model, substitution elasticity, Nationally Determined Contribution (NDC)},
url = {https://www.sciopen.com/article/10.26599/ECM.2025.9400024},
doi = {10.26599/ECM.2025.9400024},
abstract = {This paper estimates the Republic of Korea’s marginal abatement cost (MAC) of GHGs emissions for industry, buildings and agriculture sectors by implementing a three-stage linear-logit framework that links disaggregated petroleum-product choices to economy-wide factor substitution (Labor, Capital, Energy). Using annual national data (1991–2020) and an iterative nonlinear SUR estimator, we derive own- and cross-price elasticities and simulate incremental carbon-price scenarios to construct MAC curves. Our results indicate that a carbon price of approximately 50,000 KRW per tCO2eq (about $36) induces a 19.9% emissions reduction, closely aligning with the sectoral 2030 Nationally Determined Contribution (NDC) target of 20.8%. The findings provide an empirically grounded benchmark for the Republic of Korea’s carbon-pricing policy and highlight areas where complementary measures are required.}
}