Impact of carbon allowance allocation on power industry in China’s carbon trading market: Computable general equilibrium based analysis

By Lirong Zhang, Yakun Li, Zhijie Jia. Applied Energy, 2018

132 citations recorded by the source corpus.

Abstract Global warming has necessitated the quest for CO2 mitigation globally. Emission Trading Scheme (ETS) is a market-oriented strategy which may be effective for CO2 mitigation. This study establishes a Computable General Equilibrium (CGE) model to analyze the impact of different ETS quota allocation scheme on the electricity industry and determine the best choice of quota allocation scheme for the electricity industry in China. The research on China's carbon trading market may provide an important case for the global carbon trading market. The results show that different quota allocation schemes have impacts on electricity price, and there are some spillover effects to other industries. Higher Annual Decline Factor (ADF) will reduce carbon rights than lower ones. Changes in the quota allocation schemes of a single industry (electricity) can hardly affect aggregate GDP and CO2 emissions. Moreover, ETS quota allocation scheme in the electricity sector based on historical emission intensity could have better performance in commodity price, electricity supply, ETS price, GDP and social welfare. Thus, this paper suggests that the best choice of ETS quota allocation scheme in the electricity sector is the scheme that is based on historical emission intensity which ADF is 0.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/ef2c5cda13d95c9d19b044d35a512949fb2b004d

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In Economics and Econometrics

1. Boqiang Lin
2. Zhijie Jia
3. Shiyan Wen
4. Xiaoling Ouyang
5. Chuanwang Sun
6. Muhammad Shahbaz
7. Kerui Du
8. Ke Li

In Environmental Engineering

1. Boqiang Lin
2. Zhijie Jia
3. Shiyan Wen
4. Xiaoling Ouyang
5. Kerui Du
6. Chuanwang Sun
7. Bingjie Xu
8. Chunping Xie

In Renewable Energy, Sustainability and the Environment

1. Boqiang Lin
2. Zhijie Jia
3. Shiyan Wen
4. Xiaoling Ouyang
5. Kerui Du
6. Muhammad Shahbaz
7. Bingjie Xu
8. Chunping Xie

Citations in the corpus

• The effects and reacts of COVID-19 pandemic and international oil price on energy, economy, and environment in China (2021, methodology): “AEEI in the CGE model is considered in this study according to the relevant literature [45] and Medium and Long-term Energy Saving Special Planning [46].”