What is the efficiency level of carbon emissions in relation to marginal benefits and costs?

The efficiency level of carbon emissions is achieved when the marginal benefit of reducing emissions equals the marginal cost of that reduction. When these two values are equal, it indicates that the resources spent on reducing emissions are being used in their most efficient manner.

At this point, society has optimized its allocation of resources in relation to carbon emissions. If the marginal benefit exceeds the marginal cost, it would suggest that further reductions could yield greater benefits than costs incurred, but the system could be pushed beyond optimal efficiency. Conversely, if the marginal cost surpasses the marginal benefit, resources are being wasted on reductions that do not confer sufficient benefits, indicating that emissions reductions should be curtailed to reach a more efficient outcome.

Thus, the balance represented by the equality of marginal cost and marginal benefit reflects an optimal and economically efficient approach to managing carbon emissions.