Marginal GHGs abatement cost in the Republic of Korea’s economy
Year: 2025
Type: article
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.
Source: Energy and climate management.
Authors: Yoon Ji Kim, Seung Jick Yoo
Institution: Sookmyung Women's University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Climate action
Open Access status: diamond
OpenAlex ID: W7117295511