Modeling marginal CO2 emissions in hydrothermal systems: Efficient carbon signals for renewables

•Transmission congestion and hydro storage constraints impact CO2 abatement.•Proposed model calculates marginal prices and carbon emissions in space and time.•Neglecting transmission and storage hinders efficiency of CO2 abatement policies.•More accurate assessment of emission abatement of renewable projects is provided.•Marginal CO2 metrics for hydrothermal systems extensible to other types of storage.