Coordination between the energy-consumption permit trading scheme and carbon emissions trading: Evidence from China

Zhang, Y; Wei, J; Gao, Q; Shi, X; Zhou, D

Coordination between the energy-consumption permit trading scheme and carbon emissions trading: Evidence from China

Zhang, Y Wei, J Gao, Q Shi, X

Zhou, D

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Publisher:: Elsevier BV
Publication Type:: Journal Article
Citation:: Energy Economics, 2022, 116, pp. 106433
Issue Date:: 2022-12-01

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Field	Value	Language
dc.contributor.author	Zhang, Y
dc.contributor.author	Wei, J
dc.contributor.author	Gao, Q
dc.contributor.author	Shi, X https://orcid.org/0000-0001-9653-7395
dc.contributor.author	Zhou, D
dc.date.accessioned	2023-01-26T00:51:32Z
dc.date.available	2023-01-26T00:51:32Z
dc.date.issued	2022-12-01
dc.identifier.citation	Energy Economics, 2022, 116, pp. 106433
dc.identifier.issn	0140-9883
dc.identifier.uri	http://hdl.handle.net/10453/165444
dc.description.abstract	Market-oriented instruments are expected to minimize energy costs and carbon abatement, but interactions among them may create challenges. The Chinese government issued a pilot energy-consumption permit trading scheme (ECPTS) in Fujian Province, where the carbon emissions trading scheme (ETS) is in operation, thus providing an opportunity to analyze the interactions between two related market instruments. Based on the game-fixed cost allocation model and leader-follower game model, this paper designed an allocation scheme of energy-consumption permits (ECPs) based on coordination, efficiency and equity, and compared the differences in the caps, allocation structure and regional economic inequity among cities. The results of the Fujian case study show that when considering the optimal cross efficiency, the allocation of ECPs and carbon allowances are dominated by coastal cities with booming economies, which may entrench economic inequality between cities in Fujian. By introducing the equity principle, the allocation structure of ECPs among cities will change significantly, especially in underdeveloped cities. With the coordination mechanism of the ECPTS and ETS, the inequity in the distribution of economic development rights among cities can be moderated, which indicates that the designed approach has advantages in resource allocation. In addition, it is more conducive to energy saving and emission reduction if the provincial government prioritizes the allocation efficiency of ECPs instead of carbon allowances.
dc.language	en
dc.publisher	Elsevier BV
dc.relation	The National Natural Science Foundation of China7217041099
dc.relation.ispartof	Energy Economics
dc.relation.isbasedon	10.1016/j.eneco.2022.106433
dc.rights	info:eu-repo/semantics/embargoedAccess
dc.subject	0906 Electrical and Electronic Engineering, 0913 Mechanical Engineering, 1402 Applied Economics
dc.subject.classification	Energy
dc.title	Coordination between the energy-consumption permit trading scheme and carbon emissions trading: Evidence from China
dc.type	Journal Article
utslib.citation.volume	116
utslib.for	0906 Electrical and Electronic Engineering
utslib.for	0913 Mechanical Engineering
utslib.for	1402 Applied Economics
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/DVC (International)
pubs.organisational-group	/University of Technology Sydney/DVC (International)/Australia-China Relations Institute
utslib.copyright.status	open_access	*
utslib.copyright.embargo	2024-12-01T00:00:00+1000Z
dc.date.updated	2023-01-26T00:51:30Z
pubs.publication-status	Published
pubs.volume	116

Abstract:

Market-oriented instruments are expected to minimize energy costs and carbon abatement, but interactions among them may create challenges. The Chinese government issued a pilot energy-consumption permit trading scheme (ECPTS) in Fujian Province, where the carbon emissions trading scheme (ETS) is in operation, thus providing an opportunity to analyze the interactions between two related market instruments. Based on the game-fixed cost allocation model and leader-follower game model, this paper designed an allocation scheme of energy-consumption permits (ECPs) based on coordination, efficiency and equity, and compared the differences in the caps, allocation structure and regional economic inequity among cities. The results of the Fujian case study show that when considering the optimal cross efficiency, the allocation of ECPs and carbon allowances are dominated by coastal cities with booming economies, which may entrench economic inequality between cities in Fujian. By introducing the equity principle, the allocation structure of ECPs among cities will change significantly, especially in underdeveloped cities. With the coordination mechanism of the ECPTS and ETS, the inequity in the distribution of economic development rights among cities can be moderated, which indicates that the designed approach has advantages in resource allocation. In addition, it is more conducive to energy saving and emission reduction if the provincial government prioritizes the allocation efficiency of ECPs instead of carbon allowances.

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http://hdl.handle.net/10453/165444