Advancing the experiment to reality: Perspectives on Shanghai pilot carbon emissions trading scheme

Wu, Libo; Qian, Haoqi; Li, Jin

doi:10.1016/j.enpol.2014.04.022

Cited by 90 publications

(32 citation statements)

References 6 publications

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“…In order to fulfill the 20% energy intensity reduction target, the Shanghai government had subsidized amounts of energy using entities for their energy conservation and efficiency improvement efforts. For such entities that have made great progress with energy consumption reduction, the Shanghai government offers some favorable conditions in allowance allocation in the pilot carbon emissions trading scheme [35]. Such measures may be introduced in India if the government plans to bring out a carbon emissions trading scheme in the future.…”

Section: International Journal Of Environmentalmentioning

confidence: 99%

Study of Energy Regulations in India

Potdar¹,

Unnikrishnan²,

Singh³

2016

IJESD

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Abstract-This paper reports the energy management systems in India, describing the command-and-control, market-based, and voluntary approaches. Energy-related command-and-control regulations focus majorly on the electricity sector. Renewable Energy Certificate is a market-based instrument for promoting renewable sources of energy and facilitating Renewable Purchase Obligation. An analysis of the accredited and registered projects under the scheme has been presented. The Perform-Achieve-Trade scheme targets eight sectors to promote energy-efficient technology and issues an energy saving certificate for every metric ton of oil equivalent of energy saved, which can be traded on special trading platforms. About 45% of the designated consumers have met their targets for 2014 -15 while another 12.5% are on the verge of it. The voluntary regulations offer flexibility and are engaged with a broader community. They include diverse sectors such as households, Small and Medium Enterprises, and agriculture. The different energy regulation mechanisms have significantly contributed to energy-efficient technology, renewable energy, and a restructured electricity sector. The regulations employing different approaches have helped minimize the emissions of the energy sector, thereby contributing towards climate change mitigation. IndexTerms-Command-and-control, market-based mechanism, renewable energy certificate mechanism, perform-achieve-trade scheme, voluntary approach. I. INTRODUCTIONWith an increase in global population, our energy needs are also rising. The current pace of India's economic growth, together with government programs, suggests a robust growth in future power demand [1], which will create a necessity to increase energy production from conventional and non-conventional sources. Industrial energy use is responsible for a major share of anthropogenic greenhouse gas (GHG) emissions and, thus, more efficient industrial energy management and use can significantly contribute to mitigating climate change [2]. Energy efficiency is commonly seen as the most economical, minimally polluting, and most readily-available energy saving option existing in the industrial sector worldwide, which can contribute to development goals related to reducing poverty and to the global sustainability goals related to reducing emissions [3]. Emerging economies like India must meet their increasing energy demand and ensure reduction of the trade-off between economic growth and environmental degradation [2].India, in its submission of Intended Nationally Determined Contribution to the United Nations Framework Convention on Climate Change has committed towards reducing its emissions intensity of its Gross Domestic Product (GDP) by 33-35% of 2005 levels by 2030 [4]. This is to be achieved through increasing fuel efficiency standards, adopting building energy codes, augmenting forest cover, and making greater use of renewable energy sources. In this context, it is imperative that a robust analysis of the current Indian situation, as majorly appl...

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Section: International Journal Of Environmentalmentioning

confidence: 99%

Study of Energy Regulations in India

Potdar¹,

Unnikrishnan²,

Singh³

2016

IJESD

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“…The main motivation for Shanghai's policymakers to regulate indirect emissions is to encourage emissions reductions from lower demand of electricity (Wu et al 2014). In China, the pass-through rate for electricity producers arguably equals zero because of national government controls on electricity prices.…”

Section: C) Assessment Of Shanghai's Price On Carbon Consumptionmentioning

confidence: 99%

“…Generally, the power sector receives allowances according to benchmarking, and the industrial and commercial sectors receive allowances according to historic emissions (Munnings et al 2014). The direct and indirect allowances are fungible, such that an electricity producer with no indirect emissions is allowed to trade allowances with a large hotel with no direct emissions (Wu et al 2014). At the end of a compliance period, direct emitters must retire allowances for their production of carbon emissions, and indirect emitters must retire allowances equal to the emissions associated with the electricity they purchased.…”

Section: B) Motivation For Shanghai's Price On Carbon Consumptionmentioning

confidence: 99%

“…Second, a price on indirect emissions was seen as a potential solution to this problem and motivated policymakers to craft a price on carbon consumption. Notably, economic efficiency remained the primary motivation (Wu et al 2014) although Shanghai imports 20 percent of its electricity (Jotzo 2013) and therefore emissions leakage represents a potentially significant threat to the program's environmental effectiveness. The Shanghai example therefore highlights a recent but growing trend of pricing carbon consumption as a complement to pricing carbon production and for economic efficiency reasons.…”

Section: C) Assessment Of Shanghai's Price On Carbon Consumptionmentioning

confidence: 99%

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Pricing Carbon Consumption: A Review of an Emerging Trend

Munnings

Acworth

Sartor³

et al. 2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractNearly every carbon price regulates the production of carbon emissions, typically at midstream points of compliance, such as a power plant. Over the last six years, however, policymakers in Australia, California, China, Japan, and Korea implemented carbon prices that regulate the consumption of carbon emissions, where points of compliance are farther downstream, such as distributors or final consumers. This article aims to describe the design of these prices on carbon consumption, understand and explain the motivations of policymakers who have implemented them, and identify insights for policymakers considering whether to price carbon consumption. We find a clear trend of policymakers layering prices on carbon consumption on top of prices on carbon production in an effort to improve economic efficiency by facilitating additional downstream abatement. In these cases, prices on carbon consumption are used to overcome a shortcoming in the price on carbon production: incomplete pass-through of the carbon price from producers to consumers. We also find that some policymakers implement prices on carbon in an effort to reduce emissions leakage or because large producers of carbon are not within jurisdiction. Since policymakers are starting to view prices on carbon consumption as a strategy to improve economic efficiency and reduce emissions leakage in a way that is compatible with local and international law, we expect jurisdictions will increasingly implement and rely upon them.

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“…To accommodate this transition, all three cities have included large commercial and public buildings into the carbon market (Zhang, Karplus, Cassisa, & Zhang, 2014). Furthermore, Shanghai has included aviation and harbour services, and Shenzhen is considering including public transport -including buses and taxis -into the carbon market (Jiang, Ye, & Ma, 2014;Wu, Qian, & Li, 2014). Although it remains to be seen how effectively these prospects can be realized, as all the pilot programmes have been running for only one year, it is clear that the pilot carbon markets are dealing with emissions from both production and consumption standpoints.…”

Section: Carbon Pricingmentioning

confidence: 99%

China's sectoral strategies in energy conservation and carbon mitigation

2015

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This article reviews China's energy and climate strategies in the electric power, industrial, building, and transport sectors. These four sectors account for about three-quarters of China's total energy consumption and energy-related carbon emissions. We identify major gaps in China's energy and climate polices based on the status quo: first, command-and-control policies not only are costly, but also cannot accommodate the transition of energy consumption from production sectors to consumption sectors; second, unsmooth deployment of renewable energy poses challenges for decarbonizing China's electricity system. To close these gaps, we suggest two policy priorities: a carbon market to achieve cost-effective emission reduction, and a Renewable Quota System to promote the utilization of renewable energy. Challenges associated with these policies are discussed. Furthermore, we suggest that a sectoral approach can serve as a first step for China to make meaningful commitments under a prospective international climate treaty. In particular, the cement, steel, and aluminium sectors can be among the first groups to join this sectoral approach. Policy relevanceWe argue that China's sectoral climate policies should prioritize both the development of a carbon market to achieve costeffective carbon mitigation and the improvement of renewable supporting polices to foster long-term renewable technology investment. However, to fully explore the advantages of a carbon market, we suggest that more stringent emission caps should be set at the national level. In addition, the carbon market and existing energy and climate policies should be carefully harmonized. In particular, the overlaps between existing command-and-control mitigation polices and the carbon market should be reduced to improve cost-effectiveness. In parallel with a carbon market, we suggest a second-best policy, the Renewable Quota System, as a supplement to the carbon market to foster green technology development and to create preconditions for a more stringent cap. At the international level, a sectoral approach can serve as a first step for China to make meaningful commitments under a prospective international climate treaty. In particular, the cement, steel, and aluminium sectors can be among the first group to join this sectoral approach.

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Advancing the experiment to reality: Perspectives on Shanghai pilot carbon emissions trading scheme

Cited by 90 publications

References 6 publications

Study of Energy Regulations in India

Study of Energy Regulations in India

Pricing Carbon Consumption: A Review of an Emerging Trend

China's sectoral strategies in energy conservation and carbon mitigation

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