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The Integrated Effect of Carbon Emissions Trading and Pollution Rights Trading for Power Enterprises—A Case Study of Chongqing

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  • Shengxian Ge

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China)

  • Xianyu Yu

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China
    Research Centre for Soft Energy Science, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China)

  • Dequn Zhou

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China
    Research Centre for Soft Energy Science, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China)

  • Xiuzhi Sang

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing 211106, China)

Abstract

To control growing environmental problems, the pollution rights trading (PRT) center was established in Jiaxing in 2007, and China officially joined the carbon emission reduction market (NCET) in 2011. Since power enterprises are the main participants in the NCET market and PRT market, the integrated effect of the NCET market and PRT market on power enterprise profit and the regional environment is one of the major issues that needs to be taken into consideration. Based on system dynamics (SD) theory, we propose an NCET-PRT simulation model for power enterprises in Chongqing. Through analyzing parameters of carbon trading price, free ratio, and emission trading prices, 12 different simulation scenarios are configured for sensitivity analysis. Based on the simulation results, the following observations can be obtained: (1) NCET and PRT can effectively promote the performance of enterprises’ carbon emissions reduction and regional pollutant emission reduction but will have a minor negative impact on the industrial economy at the same time; (2) The trading mechanism is interactive; if the carbon emissions trading (NCET) mechanism is implemented separately, the emission of pollutants will be reduced significantly. However, the implementation of pollution rights trading (PRT) alone cannot significantly reduce CO 2 emissions; (3) At an appropriate level, NCET and PRT can be enhanced to achieve a maximum emissions reduction effect at a minimum economic cost.

Suggested Citation

  • Shengxian Ge & Xianyu Yu & Dequn Zhou & Xiuzhi Sang, 2019. "The Integrated Effect of Carbon Emissions Trading and Pollution Rights Trading for Power Enterprises—A Case Study of Chongqing," Sustainability, MDPI, vol. 11(11), pages 1-17, June.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:11:p:3099-:d:236323
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    1. Ruiqi Wang & Huanchen Tang & Xin Ma, 2022. "Can Carbon Emission Trading Policy Reduce PM2.5? Evidence from Hubei, China," Sustainability, MDPI, vol. 14(17), pages 1-21, August.
    2. Shijie Wang & Laijun Zhao & Yong Yang & Chenchen Wang & Jian Xue & Xin Bo & Deqiang Li & Dengguo Liu, 2019. "A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    3. Li, Dezhi & Huang, Guanying & Zhu, Shiyao & Chen, Long & Wang, Jiangbo, 2021. "How to peak carbon emissions of provincial construction industry? Scenario analysis of Jiangsu Province," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    4. Yizhang He & Wei Song, 2022. "Analysis of the Impact of Carbon Trading Policies on Carbon Emission and Carbon Emission Efficiency," Sustainability, MDPI, vol. 14(16), pages 1-20, August.

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