Methane is one of the greenhouse gases that contribute to global warming. It is released into the atmosphere from landfills, natural gas systems, coal mining, and livestock management. In this case, abatement of emissions requires methane recovery capturing the gas before it is released into the atmosphere and then using it to generate heat or electricity. The marginal cost of abatement is less than $10 per ton for the first 36 million metric tons, and increases at an increasing rate, reaching $150 per ton at 69 million metric tons. It is relatively cheap to recover moderate amounts of methane from landfills and coal mines and to reduce leaks in the distribution of natural gas. As the volume recovered increases, however, the abatement systems become progressively more expensive. For example, it is relatively cheap to reduce natural-gas leakage by maintaining surface facilities such as pipelines, but relatively expensive to reduce venting at production sites.
What is the optimal level of methane abatement? It depends on the marginal benefit of abatement. For example, if the marginal benefit is $10, the optimum level is about 36 million metric tons. But if the marginal benefit is $150, the optimum level of abatement is about 69 million metric tons.