IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v288y2021ics030626192100180x.html
   My bibliography  Save this article

Socioeconomic impacts of household participation in emission trading scheme: A Computable General Equilibrium-based case study

Author

Listed:
  • An, Kangxin
  • Zhang, Shihui
  • Huang, Hai
  • Liu, Yuan
  • Cai, Wenjia
  • Wang, Can

Abstract

Policy on household carbon reduction behavior has an important role on climate actions but is neglected in practice. Household energy consumption is uncontrolled under the current policy both in the developed and developing countries, which is inefficient towards an ambitious climate target. Household participation in emission trading scheme (ETS) is a valuable solution. Enhancing understanding of socioeconomic impacts of the policy will facilitate the deployment and development on ground in the countries with ETS. The dynamic computable general equilibrium model with extended linear expenditure system and emission trading scheme, is used to analyze the impacts. With the case study of China, we find that compared with ETS without household participation, household participation can reduce 45.5% and 28.1% of carbon emissions of rural and urban households, reduce 13.60–14.01% of carbon mitigation cost, reduce household welfare loss and influence social equity in 2050. The allocation mechanism of carbon allowances has significant impact on household welfare and social equity. The methodology can be applied in other regions to explore the magnitude of impacts. This study evidences the benefits of household participation in ETS, and provides policy-makers some insights to design a careful and reasonable household carbon reduction policy around the world.

Suggested Citation

  • An, Kangxin & Zhang, Shihui & Huang, Hai & Liu, Yuan & Cai, Wenjia & Wang, Can, 2021. "Socioeconomic impacts of household participation in emission trading scheme: A Computable General Equilibrium-based case study," Applied Energy, Elsevier, vol. 288(C).
    • Handle: RePEc:eee:appene:v:288:y:2021:i:c:s030626192100180x
    DOI: 10.1016/j.apenergy.2021.116647
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030626192100180X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2021.116647?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fan, Jin & He, Haonan & Wu, Yanrui, 2016. "Personal carbon trading and subsidies for hybrid electric vehicles," Economic Modelling, Elsevier, vol. 59(C), pages 164-173.
    2. Huang, Hai & Roland-Holst, David & Springer, Cecilia & Lin, Jiang & Cai, Wenjia & Wang, Can, 2019. "Emissions trading systems and social equity: A CGE assessment for China," Applied Energy, Elsevier, vol. 235(C), pages 1254-1265.
    3. Kuokkanen, Anna & Sihvonen, Markus & Uusitalo, Ville & Huttunen, Anna & Ronkainen, Tuuli & Kahiluoto, Helena, 2020. "A proposal for a novel urban mobility policy: Personal carbon trade experiment in Lahti city," Utilities Policy, Elsevier, vol. 62(C).
    4. Åsa Johansson & Yvan Guillemette & Fabrice Murtin & David Turner & Giuseppe Nicoletti & Christine de la Maisonneuve & Philip Bagnoli & Guillaume Bousquet & Francesca Spinelli, 2013. "Long-Term Growth Scenarios," OECD Economics Department Working Papers 1000, OECD Publishing.
    5. Jing Cao, Mun S. Ho, and Huifang Liang, 2016. "Household energy demand in Urban China: Accounting for regional prices and rapid income change," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    6. Duarte, Rosa & Sánchez-Chóliz, Julio & Sarasa, Cristina, 2018. "Consumer-side actions in a low-carbon economy: A dynamic CGE analysis for Spain," Energy Policy, Elsevier, vol. 118(C), pages 199-210.
    7. Bristow, Abigail L. & Wardman, Mark & Zanni, Alberto M. & Chintakayala, Phani K., 2010. "Public acceptability of personal carbon trading and carbon tax," Ecological Economics, Elsevier, vol. 69(9), pages 1824-1837, July.
    8. Mu, Yaqian & Cai, Wenjia & Evans, Samuel & Wang, Can & Roland-Holst, David, 2018. "Employment impacts of renewable energy policies in China: A decomposition analysis based on a CGE modeling framework," Applied Energy, Elsevier, vol. 210(C), pages 256-267.
    9. Cao, Jing & Ho, Mun S. & Hu, Wenhao & Jorgenson, Dale, 2020. "Estimating flexible consumption functions for urban and rural households in China," China Economic Review, Elsevier, vol. 61(C).
    10. Hu, Wenhao & Ho, Mun S. & Cao, Jing, 2019. "Energy consumption of urban households in China," China Economic Review, Elsevier, vol. 58(C).
    11. Fan, Jin & Wang, Shanyong & Wu, Yanrui & Li, Jun & Zhao, Dingtao, 2015. "Buffer effect and price effect of a personal carbon trading scheme," Energy, Elsevier, vol. 82(C), pages 601-610.
    12. Teng, Meixuan & Burke, Paul J. & Liao, Hua, 2019. "The demand for coal among China's rural households: Estimates of price and income elasticities," Energy Economics, Elsevier, vol. 80(C), pages 928-936.
    13. Shanyong Wang & Jin Fan & Dingtao Zhao & Shu Yang & Yuanguang Fu, 2016. "Predicting consumers’ intention to adopt hybrid electric vehicles: using an extended version of the theory of planned behavior model," Transportation, Springer, vol. 43(1), pages 123-143, January.
    14. Tina Fawcett & Yael Parag, 2010. "An introduction to personal carbon trading," Climate Policy, Taylor & Francis Journals, vol. 10(4), pages 329-338, July.
    15. Long, Yin & Yoshida, Yoshikuni & Meng, Jing & Guan, Dabo & Yao, Liming & Zhang, Haoran, 2019. "Unequal age-based household emission and its monthly variation embodied in energy consumption – A cases study of Tokyo, Japan," Applied Energy, Elsevier, vol. 247(C), pages 350-362.
    16. Wadud, Zia, 2011. "Personal tradable carbon permits for road transport: Why, why not and who wins?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1052-1065.
    17. Lin, Boqiang & Jia, Zhijie, 2020. "Is emission trading scheme an opportunity for renewable energy in China? A perspective of ETS revenue redistributions," Applied Energy, Elsevier, vol. 263(C).
    18. Charles Raux & Yves Croissant & Damien Pons, 2015. "Would personal carbon trading reduce travel emissions more effectively than a carbon tax?," Post-Print halshs-01099917, HAL.
    19. Chen, Han & Chen, Wenying, 2019. "Potential impact of shifting coal to gas and electricity for building sectors in 28 major northern cities of China," Applied Energy, Elsevier, vol. 236(C), pages 1049-1061.
    20. Mu, Yaqian & Wang, Can & Cai, Wenjia, 2018. "The economic impact of China's INDC: Distinguishing the roles of the renewable energy quota and the carbon market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2955-2966.
    21. Wadud, Zia & Chintakayala, Phani Kumar, 2019. "Personal Carbon Trading: Trade-off and Complementarity Between In-home and Transport Related Emissions Reduction," Ecological Economics, Elsevier, vol. 156(C), pages 397-408.
    22. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2014. "The added value from a general equilibrium analysis of increased efficiency in household energy use," Ecological Economics, Elsevier, vol. 100(C), pages 51-62.
    23. Dai, Hancheng & Masui, Toshihiko & Matsuoka, Yuzuru & Fujimori, Shinichiro, 2012. "The impacts of China’s household consumption expenditure patterns on energy demand and carbon emissions towards 2050," Energy Policy, Elsevier, vol. 50(C), pages 736-750.
    24. Kirchner, Mathias & Sommer, Mark & Kratena, Kurt & Kletzan-Slamanig, Daniela & Kettner-Marx, Claudia, 2019. "CO2 taxes, equity and the double dividend – Macroeconomic model simulations for Austria," Energy Policy, Elsevier, vol. 126(C), pages 295-314.
    25. Wang, Ke & Wang, Can & Chen, Jining, 2009. "Analysis of the economic impact of different Chinese climate policy options based on a CGE model incorporating endogenous technological change," Energy Policy, Elsevier, vol. 37(8), pages 2930-2940, August.
    26. Tian, Xu & Geng, Yong & Dai, Hancheng & Fujita, Tsuyoshi & Wu, Rui & Liu, Zhe & Masui, Toshihiko & Yang, Xie, 2016. "The effects of household consumption pattern on regional development: A case study of Shanghai," Energy, Elsevier, vol. 103(C), pages 49-60.
    27. Niemeier, D. & Gould, Gregory & Karner, Alex & Hixson, Mark & Bachmann, Brooke & Okma, Carrie & Lang, Ziv & Heres Del Valle, David, 2008. "Rethinking downstream regulation: California's opportunity to engage households in reducing greenhouse gases," Energy Policy, Elsevier, vol. 36(9), pages 3436-3447, September.
    28. Raux, Charles & Marlot, Grégoire, 2005. "A system of tradable CO2 permits applied to fuel consumption by motorists," Transport Policy, Elsevier, vol. 12(3), pages 255-265, May.
    29. Jia, Zhijie & Lin, Boqiang, 2020. "Rethinking the choice of carbon tax and carbon trading in China," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    30. Mu, Yaqian & Evans, Samuel & Wang, Can & Cai, Wenjia, 2018. "How will sectoral coverage affect the efficiency of an emissions trading system? A CGE-based case study of China," Applied Energy, Elsevier, vol. 227(C), pages 403-414.
    31. Shanyong Wang & Jin Fan & Dingtao Zhao & Shu Yang & Yuanguang Fu, 2016. "Predicting consumers’ intention to adopt hybrid electric vehicles: using an extended version of the theory of planned behavior model," Transportation, Springer, vol. 43(1), pages 123-143, January.
    32. Li, Wenbo & Long, Ruyin & Chen, Hong & Yang, Tong & Geng, Jichao & Yang, Muyi, 2018. "Effects of personal carbon trading on the decision to adopt battery electric vehicles: Analysis based on a choice experiment in Jiangsu, China," Applied Energy, Elsevier, vol. 209(C), pages 478-488.
    33. Yael Parag & Stuart Capstick & Wouter Poortinga, 2011. "Policy attribute framing: A comparison between three policy instruments for personal emissions reduction," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(4), pages 889-905, September.
    34. Fawcett, Tina, 2010. "Personal carbon trading: A policy ahead of its time?," Energy Policy, Elsevier, vol. 38(11), pages 6868-6876, November.
    35. Tan, Xueping & Wang, Xinyu & Zaidi, Syed Haider Ali, 2019. "What drives public willingness to participate in the voluntary personal carbon-trading scheme? A case study of Guangzhou Pilot, China," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    36. Edwin Woerdman & Jan Willem Bolderdijk, 2017. "Emissions trading for households? A behavioral law and economics perspective," European Journal of Law and Economics, Springer, vol. 44(3), pages 553-578, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lee, Chien-Chiang & Hussain, Jafar, 2023. "An assessment of socioeconomic indicators and energy consumption by considering green financing," Resources Policy, Elsevier, vol. 81(C).
    2. Wen, Shiyan & Jia, Zhijie, 2022. "The energy, environment and economy impact of coal resource tax, renewable investment, and total factor productivity growth," Resources Policy, Elsevier, vol. 77(C).
    3. Siying Yang & Wenxuan Sun & Zhouyi Wu & Yang He, 2022. "Can the SO2 emission trading system promote urban emission reduction?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 963-974, June.
    4. Saman Nikkhah & Adib Allahham & Janusz W. Bialek & Sara L. Walker & Damian Giaouris & Simira Papadopoulou, 2021. "Active Participation of Buildings in the Energy Networks: Dynamic/Operational Models and Control Challenges," Energies, MDPI, vol. 14(21), pages 1-28, November.
    5. Zhang, Lihui & Li, Songrui & Nie, Qingyun & Hu, Yitang, 2022. "A two-stage benefit optimization and multi-participant benefit-sharing strategy for hybrid renewable energy systems in rural areas under carbon trading," Renewable Energy, Elsevier, vol. 189(C), pages 744-761.
    6. Xiwen Fu & Shuxin Wang, 2022. "How to Promote Low-Carbon Cities with Blockchain Technology? A Blockchain-Based Low-Carbon Development Model for Chinese Cities," Sustainability, MDPI, vol. 14(20), pages 1-17, October.
    7. An, Kangxin & Wang, Can & Cai, Wenjia, 2023. "Low-carbon technology diffusion and economic growth of China: an evolutionary general equilibrium framework," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 253-263.
    8. Jia, Zhijie & Lin, Boqiang & Wen, Shiyan, 2022. "Electricity market Reform: The perspective of price regulation and carbon neutrality," Applied Energy, Elsevier, vol. 328(C).
    9. Wu, Qunli & Ma, Zhe & Meng, Fanxing, 2022. "Long-term impacts of carbon allowance allocation in China: An IC-DCGE model optimized by the hypothesis of imperfectly competitive market," Energy, Elsevier, vol. 241(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nie, Qingyun & Zhang, Lihui & Li, Songrui, 2022. "How can personal carbon trading be applied in electric vehicle subsidies? A Stackelberg game method in private vehicles," Applied Energy, Elsevier, vol. 313(C).
    2. Anna-Katharina Kothe & Alexander Kuptel & Roman Seidl, 2021. "Simulating Personal Carbon Trading (PCT) with an Agent-Based Model (ABM): Investigating Adaptive Reduction Rates and Path Dependence," Energies, MDPI, vol. 14(22), pages 1-15, November.
    3. Fan, Jin & He, Haonan & Wu, Yanrui, 2016. "Personal carbon trading and subsidies for hybrid electric vehicles," Economic Modelling, Elsevier, vol. 59(C), pages 164-173.
    4. Li, Wenbo & Long, Ruyin & Chen, Hong & Yang, Tong & Geng, Jichao & Yang, Muyi, 2018. "Effects of personal carbon trading on the decision to adopt battery electric vehicles: Analysis based on a choice experiment in Jiangsu, China," Applied Energy, Elsevier, vol. 209(C), pages 478-488.
    5. Uusitalo, V. & Huttunen, A. & Kareinen, E. & von Wright, T. & Valjakka, M. & Pitkänen, A. & Levänen, J., 2022. "Using personal carbon trading to reduce mobility emissions: A pilot in the Finnish city of Lahti," Transport Policy, Elsevier, vol. 126(C), pages 177-187.
    6. Dogterom, Nico & Ettema, Dick & Dijst, Martin, 2018. "Behavioural effects of a tradable driving credit scheme: Results of an online stated adaptation experiment in the Netherlands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 52-64.
    7. Tan, Xueping & Wang, Xinyu & Zaidi, Syed Haider Ali, 2019. "What drives public willingness to participate in the voluntary personal carbon-trading scheme? A case study of Guangzhou Pilot, China," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    8. Fan, Jin & Li, Jun & Wu, Yanrui & Wang, Shanyong & Zhao, Dingtao, 2016. "The effects of allowance price on energy demand under a personal carbon trading scheme," Applied Energy, Elsevier, vol. 170(C), pages 242-249.
    9. Raux, Charles & Chevalier, Amandine & Bougna, Emmanuel & Hilton, Denis, 2021. "Mobility choices and climate change: Assessing the effects of social norms, emissions information and economic incentives," Research in Transportation Economics, Elsevier, vol. 90(C).
    10. Nie, Qingyun & Zhang, Lihui & Tong, Zihao & Hubacek, Klaus, 2022. "Strategies for applying carbon trading to the new energy vehicle market in China: An improved evolutionary game analysis for the bus industry," Energy, Elsevier, vol. 259(C).
    11. Wadud, Zia & Chintakayala, Phani Kumar, 2019. "Personal Carbon Trading: Trade-off and Complementarity Between In-home and Transport Related Emissions Reduction," Ecological Economics, Elsevier, vol. 156(C), pages 397-408.
    12. H. M. Abdul Aziz & Satish V. Ukkusuri & Xianyuan Zhan, 2017. "Determining the Impact of Personal Mobility Carbon Allowance Schemes in Transportation Networks," Networks and Spatial Economics, Springer, vol. 17(2), pages 505-545, June.
    13. Yao Li & Shuai Wang, 2023. "Personal emission permit trading scheme: urban spatial equilibrium and planning," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 116(1), pages 1239-1259, March.
    14. Li, Yao & Fan, Jin & Zhao, Dingtao & Wu, Yanrui & Li, Jun, 2016. "Tiered gasoline pricing: A personal carbon trading perspective," Energy Policy, Elsevier, vol. 89(C), pages 194-201.
    15. Pitkänen, Atte & von Wright, Tuuli & Kaseva, Janne & Kahiluoto, Helena, 2022. "Distributional fairness of personal carbon trading," Ecological Economics, Elsevier, vol. 201(C).
    16. Wang, Haibing & Zheng, Tianhang & Sun, Weiqing & Khan, Muhammad Qasim, 2023. "Research on the pricing strategy of park electric vehicle agent considering carbon trading," Applied Energy, Elsevier, vol. 340(C).
    17. von Wright, Tuuli & Kaseva, Janne & Kahiluoto, Helena, 2022. "Needs must? Fair allocation of personal carbon allowances in mobility," Ecological Economics, Elsevier, vol. 200(C).
    18. Alice Brock & Simon Kemp & Ian D. Williams, 2022. "Personal Carbon Budgets: A Pestle Review," Sustainability, MDPI, vol. 14(15), pages 1-18, July.
    19. Daoyan Guo & Hong Chen & Ruyin Long, 2019. "What Role Should Government Play in the Personal Carbon Trading Market: Motivator or Punisher?," IJERPH, MDPI, vol. 16(11), pages 1-16, May.
    20. Yong Liu, 2019. "Residents’ Willingness and Influencing Factors on Action Personal Carbon Trading: A Case Study of Metropolitan Areas in Tianjin, China," Sustainability, MDPI, vol. 11(2), pages 1-13, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:288:y:2021:i:c:s030626192100180x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.