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Green power-TGC-CET conversion mechanism design, dynamic evaluation and selection: Enhancing multi-market synergy

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  • Liu, Lili
  • Feng, Tiantian
  • Li, Yan
  • Zhong, Cheng
  • Wang, Haoran
  • Xuan, Jiadong

Abstract

The design of conversion mechanisms for environmental equity products is crucial to strengthen the synergistic development of the carbon emission trading (CET), tradable green certificate (TGC) and green power trading markets. First, this paper measures the carbon reduction of renewable energy generators (REGs) by using the life cycle assessment (LCA) method, and designs the conversion mechanisms between green power, TGC, China certified emission reduction (CCER) and carbon allowance (CA) from the perspective of carbon offset, carbon reduction and techno-economic cost. Then, the multi-time coupled model with the synergy of green power-TGC-CET is constructed to evaluate the effect of various conversion mechanisms on the multiple markets and participants' behavioral decisions. Finally, the best conversion mechanism is selected from the perspectives of effectiveness and efficiency. The results show that green power-TGC-CCER-CA conversion mechanisms promote the development of renewable energy (RE) and carbon reduction, and effectively help China's national CET market to include more key emitting sectors. The green power-TGC-CCER-CA conversion mechanism, based on carbon reduction, is optimal for improving the economic and environmental effects, and enhancing the vitality and competitiveness of markets. These insights can enrich research on the conversion mechanism between environmental equity products and provide mechanisms selection for the future dynamic adjustment of favorable linkage and synergy between green power-TGC- CET markets.

Suggested Citation

  • Liu, Lili & Feng, Tiantian & Li, Yan & Zhong, Cheng & Wang, Haoran & Xuan, Jiadong, 2025. "Green power-TGC-CET conversion mechanism design, dynamic evaluation and selection: Enhancing multi-market synergy," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325005237
    DOI: 10.1016/j.eneco.2025.108696
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