Initial allocation of carbon emission permits in power systems

Initial allocation modes and schemes are studied in this paper to provide guidelines for allocation of carbon emission permits in power system. We first introduce different allocation modes and the need to apply free allocation to assignability of emission permits. Then, we compare two different allocation schemes, which are based on historical emissions and generation performance standard. Further, a new allocation scheme based on Boltzmann distribution is proposed. Finally, a case study on Shanghai power grid in China is conducted to compare the allocation effects of these schemes respectively. The analytical results show that Boltzmann distribution based scheme has the best performance and should be adopted when developing initial allocation of carbon emission permits in Chinese power systems.

Intensity Allocation Criteria of Carbon Emissions Permits and Regional Economic Development in China——Based on a 30-Province/Autonomous Region Computable General Equilibrium Model

The intensity allocation criteria of carbon emissions permits and its influence on China＇s regional development are analyzed through the 30-province/autonomous region computable general equilibrium （CGE） model. Simulation results show that： industrial intensity criteria without taking regional economic development into account deepen the unbalance of regional economic development; regional intensity criteria without taking industrial properties into account exert little negative impact on regional harmonious development, but relatively high negative influence on high-carbon emission industries. The two-step allocation scheme that the central government allocates emissions permits to provincial governments based on regional economic development and then provincial governments allocate emissions permits to emission resources or entities based on industrial properties is a feasible and operable choice.

Estimate of Peaks of Carbon Emissions and Pricing of Carbon Emission Permit in China

With the aid of Matlab software, the peaks of China＇s carbon emissions and their appearing time in three situations were simulated, and the shallow price of carbon emission permit and its effects on China＇s economic growth were analyzed. The results show that it is most effective and feasible to reduce energy consumption per GDP by 25%, and the peak of China＇s carbon emissions will appear in 2017. As a result, energy conser- vation and emission reduction is realized, and China＇s international talk power about carbon emission will improved. However, the shallow price and permit rate of carbon emission permit calculated in the situation are the lowest, and the adverse impact of the initial price of carbon emissions on China＇s economic growth is the largest. Therefore, consideration should be given to both the promotion of pricing and trading of carbon emission permit to reduction of carbon emissions and their adverse effects on GDP in China.

Study on carbon intensity trading market based on carbon finance mechanism

As the largest developing country in the world, China has not be involved in the obligation of emissions reduction in the （〈Kyoto Protocol）） . But it has become the largest CO2 emissions countries in the world. This makes China confronted with more pressure of carbon emissions reduction in the post-Kyoto era, and face great challenges in response to climate change issues. On one hand, China＇ s economic growth stage has decided that the situation of more energy consumption and increased carbon emissions is diffficult to reverse in the short term; On the other hand, the traditional policy under the control of total amount of carbon emission has largely restricted economic development. If a developing country in economic transition is carried out compulsory absolute amount of carbon reduction policies, its economic activity and social consumption will be imposed additional constraints inevitably, which will eventually lead to lower economic competitiveness and decline in social standards of living. Ultimately it will affect the good effects of carbon emissions reduction, so the policy can not achieve a satisfactory result. This paper introduces the financial mechanism into the carbon market model, extends the time of model from one phase to multi-phase. And this paper tries to establish a cross-time carbon credits trade system, and the current strength of the traditional carbon emission market trade model is extended. The paper designs two type of option mechanism model--call options trade carbon emissions model and put options carbon emissions model. Models＇ results show that choosing options tool to extend our traditional carbon market model can bring following impacts on carbon market development： trade costs have fallen, the carbon intensity also has descended, and has realized the flow of carbon intensity in diffident time; it enables manufacturers to effectively avoid the risk of carbon emissions trade; it increases the flexibility and maneuverability of the carbon trade market. Finally, the policy recommendations in the financial mechanisms carbon market trade are put forward.

Environmental Capital,Negative Externality and Carbon Finance Innovation

In the context of global climate change,the internalization of negative externality,which is brought about by the traditional mode of economic growth,has become an inevitable choice.In order to achieve the internalization,it is necessary to make innovations on the market mechanism and system,find the value of environmental capital,establish a new mode of economic growth based on environmental capital,and then transform the environmental capital,an exogenous factor of economic growth,into an endogenous factor.Of this,the key of market mechanism and system innovation is the financial innovation that is based on environmental capital and negative externality;the government defines the initial property right of environmental resources and establishes environment energy trading market,so as to guide enterprises to trade environmental resources(represented by carbon emission permit trading) based on the Clean Development Mechanism,and to vigorously develop environmental finance and carbon finance.

A Study of the Dynamic Mechanisms and Effects of Allocating Emissions Permits under Endogenous Growth

The allocation of carbon emissions permits is a major component of the design of carbon trading schemes. The choice of allocation mechanisms can influence the long-term growth path, which in turn affects the effectiveness of the emissions reduction policy. The findings of this article indicate that while a static allocation mechanism can maximize current yields, it leads to a slowdown in output growth under endogenous economic growth. To optimize intertemporal economic output, the allocation of carbon emissions will need to be dynamically adjusted. In the absence of complete information, an output-oriented adjustment to the allocation of emissions rights in different periods can guide market trading so that it approaches a long-term optimal growth path.

Incentive equilibrium strategies of transboundary industrial pollution control under emission permit trading

In this paper,we investigate the incentive equilibrium strategies of two neighboring regions facing transboundary industrial pollution under abatement investment and emission permits trading in a differential game setting.Our paper can be viewed as an extension of the work of Yeung[2007.Dynamically consistent cooperative solution in a differential game of transboundary industrial pollution.Journal of Optimization Theory and Applications,134,143-160]in the context of the transboundary industrial pollution.Compared with the work of Yeung[2007.Dynamically consistent cooperative solution in a differential game of transboundary industrial pollution.Journal of Optimization Theory and Applications,134,143-160],our research significant features(i)introduce the emission permits trading into the transboundary industrial pollution control;(ii)take into account the pollution abatement investment;(iii)examine the incentive equilibrium strategies of transboundary industrial pollution control;and(iv)design an allocation mechanism for regions’cooperative profits.Furthermore,we illustrate the results of the paper with a numerical example.The utility of this paper is how to make incentive equilibrium strategies in a situation where the neighboring regions facing transboundary industrial pollution under abatement investment and emission permits trading in a differential game setting.

Study on Cleaner Production Subsidies, Income Distribution Imbalance and Carbon Emissions Permit Reallocation Mechanism

The allocation mechanism for carbon emissions permit(CEP)is an institutional guarantee for advancing the development of China’s unified carbon trading market.The initial allocation of carbon quotas fails to solve new inequalities stemming from subsidizing cleaner production.This paper constructs a theoretical framework that describes China’s progressive decline in carbon intensity,calculates the equilibrium solution on the neoclassical saddle point path using the shooting method,and studies the income distribution imbalance caused by cleaner production subsidies and the reallocation mechanism of carbon emissions permit The main conclusion is that the incremental cleaner production subsidy policy meets the goal of maximizing welfare on the saddle point path,but it may lead to over-investment in the clean sector,thus causing the income distribution imbalance among entities.Further research suggests that the amount of carbon emissions permit acquired by the clean sector should be higher than the actual emissions in the trading market and that,as the cleaner support increases,the share of carbon emissions permit acquired by the sector should be constantly increased through reallocation mechanism.This helps achieve the Pareto improvement in all parties’economic benefi ts.