Description
Return gap = marginalCost-averageCost.
Average, incremental and marginal environmental costs answer different questions. A ratio over a finite reduction is a step average, while marginal cost describes an additional unit; meaningful comparisons need common periods, boundaries and units.
Return gap = marginalCost-averageCost.
When to use this tool
Use Abatement Average Increment Gap when checking a supplied environmental cost contribution or comparison.
How to use the tool and how it works
- Enter averageCost, marginalCost, averageBasis, marginalBasis. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read gap. Use the output convention below.
Require a nonempty averageBasis string exactly equal to marginalBasis. Return gap = marginalCost-averageCost. The two costs must use the same currency per output or abatement unit and the same period and valuation boundary.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| averageCost | Average Cost | Required. Finite number. |
| marginalCost | Marginal Cost | Required. Finite number. |
| averageBasis | Average Basis | Required. Text; maximum UTF-16 length 8192. |
| marginalBasis | Marginal Basis | Required. Text; maximum UTF-16 length 8192. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| gap | Signed first or corrected value minus the stated reference, on their common unit basis. | Required. Finite number. |
{
"input": {
"averageCost": 20,
"marginalCost": 30,
"averageBasis": "USD/tonne",
"marginalBasis": "USD/tonne"
},
"output": {
"gap": 10
}
}Limitations and assumptions
- Equal basis labels are a caller assertion, not a unit conversion or proof that the costs are comparable. The tool does not estimate either cost, derive a curve or locate an economic optimum.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Assemble comparable costs and effects across the full baseline and project, and distinguish financial costs from social costs before ranking alternatives.
References
Similar or alternative tools
- Abatement Cost Curve Segment
Return incrementalQuantity = endQuantity-startQuantity and segmentCost = incrementalQuantity*(startMarginalCost+endMarginalCost)/2.
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