Marginal abatement costs of industrial CO₂ emissions and their influence factors in China

Accurately estimating the marginal abatement costs (MAC) is the premise for promoting carbon reduction. We applied the quadratic directional distance function to calculate the MAC of CO₂ emissions of 37 industries in China covering 2005-2016. Based on the estimation, we investigated the influencing factors of the MAC and assessed how policy implications suggested in this paper reflect the environmental performance. The results indicated: (1) The average MAC of reducing CO₂ emission in China increased from 9.26 thousand yuan/tonCO₂ (1.45 thousand USD/tonCO₂) in 2005 to 54.04 thousand yuan/tonCO₂ in 2016, with an average value of 16.73 thousand yuan/tonCO₂. (2) Theindustries with higher MAC are distributed in light industries and technology-intensive industries. (3) There is a robust U-shaped relationship between carbon intensity and the MAC. In addition, capital stock, energy efficiency, energy infrastructure, and environmental policy positively influence MAC, while industrial output, energy consumption structure and openness are negatively correlated with MAC. (4) Increasing energy efficiency and openness degree can improve environmental performance, while industrial output, energy consumption structure, and energy infrastructure have a negative influence on environmental performance.