Allocating provincial CO₂ quotas for the Chinese national carbon program

Abstract

In order to improve the efficiency of climate change initiatives China launched its national carbon market in December 2017. Initial CO2 quota allocations are a matter of significant concern. How should we allocate CO 2 emissions reduction responsibilities among Chinese provinces, assuming that provinces will not or cannot trade these responsibilities among themselves? In this paper, we allocate CO 2 quota from the perspective of cost minimisation. First, we estimate the national CO 2 marginal abatement cost (MAC) function and deduce the interprovincial MAC functions. Second, we build an allocation model with nonlinear programming for cost minimisation. Finally, we obtain the allocation results under the emissions reduction target by 2030. The results are as follows. (i) The national MAC was 134.3 Yuan/t (at the constant price of 1978) in 2011, with an overall upward trend from 1990 to 2011. (ii) The interprovincial MACs differ significantly and decline gradually from east to west. Hebei has the largest emissions reduction quota, and Shandong has the largest emissions quota by 2030. (iii) Compared with other criteria of per capita, gross domestic product (GDP), grandfathering and carbon intensity, the proposed approach is the most cost-effective in achieving the reduction target, with cost savings of 37.7, 34.5, 47.9 and 33.87 per cent, respectively.

Implications of a cap‐and‐trade system for emission reductions under an asymmetric duopoly

“…Then we consider the first stage, and the authority defines the emission caps. Many types of emission allocation have been analyzed in recent years, including emission caps based on generalized social welfare (GSW), as studied in Yang, Chen, and Nie (2016) and Yang and Nie (2016), and cap allocation based on historic emissions and market auction (Groenenberg & Blok, 2002; Jiang, Yang, Chen, & Nie, 2016; Jiang et al, 2018). Here, we consider that the authority allocates emission caps to maximize general social welfare, which is similar to the allocation in Yang and Nie (2016).…”

Analysis on Change of Precipitation pH and Chemical Characteristics of Acid Rain in Liaoning Province (2007�2018)

“…The ensuing phenomenon will appear in the atmospheric precipitation of inland cities, and the composition of sea salt ions is higher than that of coastal cities. Of course, the final conclusion needs further observation, analysis and verification [48][49][50][51][52][53][54][55][56][57][58].…”

Does carbon farming provide a cost‐effective option to mitigate GHG emissions? Evidence from China

“…the emission trading pilot introduced in 2012 and the national emission trading scheme launched in 2017) (Jiang et al . ), it is also of policy interest to know whether carbon farming provides a cost‐effective solution to GHG emission reduction. To ease the implementation of the emission trading pilots, the regulatory authorities were reluctant to set stringent emission caps.…”