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Continuous allocation and compensation of carbon emission rights considering expert credibility and uncertainty — A case study of China

Author

Listed:
  • Huang, Xin
  • Chi, Chen
  • Shen, Juqin
  • Sun, Fuhua
  • Ge, Qiuyi
  • Hu, Pei

Abstract

The rational allocation of Carbon Emission Rights (CERs) and the corresponding development of Carbon Compensation Plans (CCPs) are crucial for China to achieve its carbon neutrality goals. To this purpose, this study proposed an integrated “allocation + compensation” research framework for planning CER allocation schemes across different Chinese regions and designing corresponding CCPs. First, a new CER allocation indicator system was developed based on four principles: equity, efficiency, sustainability, and government macro macro-control. Second, a novel CER allocation model was constructed, incorporating Triangular Fuzzy Numbers (TFNs), expert reliability, and the TODIM method, with the aim to differentiate the impact of varying levels of expert professionalism and the fuzziness of expert linguistic judgments on CER allocation and compensation. Based on this framework, a continuous CER allocation and CCP scheme for China through 2030 was developed. The main findings are as follows: (1) The proposed CER allocation scheme outperforms traditional allocation methods and principles, balancing equity, efficiency, sustainability, and macro-regulation, while also accounting for the fuzziness in expert judgment. (2) The new allocation plan grants more CERs to regions with historically high emissions, while also ensuring adequate CERs for key areas. The main payers of CCPs are concentrated in the more economically developed central and eastern regions. In contrast, the northern and western regions receive the largest amounts of compensation. (3) The analysis using the Tapio decoupling index showed that, up to 2030, CER and GDP will not be completely decoupled in most regions. Beijing and Tianjin are expected to achieve weak decoupling by 2027 and 2028, respectively, while other regions are projected to do so before 2025. This study provides valuable reference for the formulation of regional energy, economic development, and environmental protection policies, offering important insights for policymakers and stakeholders.

Suggested Citation

  • Huang, Xin & Chi, Chen & Shen, Juqin & Sun, Fuhua & Ge, Qiuyi & Hu, Pei, 2025. "Continuous allocation and compensation of carbon emission rights considering expert credibility and uncertainty — A case study of China," Energy, Elsevier, vol. 339(C).
    • Handle: RePEc:eee:energy:v:339:y:2025:i:c:s0360544225046262
    DOI: 10.1016/j.energy.2025.138984
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