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Forecasting the Allocation Ratio of Carbon Emission Allowance Currency for 2020 and 2030 in China

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  • Shihong Zeng

    (Applied Economics Department, Economic Management School, Beijing University of Technology, Beijing 100124, China
    Finance and Economics Development Research Center, Economic Management School, Beijing University of Technology, Beijing 100124, China)

  • Jiuying Chen

    (Applied Economics Department, Economic Management School, Beijing University of Technology, Beijing 100124, China
    Finance and Economics Development Research Center, Economic Management School, Beijing University of Technology, Beijing 100124, China)

Abstract

Many countries and scholars have used various strategies to improve and optimize the allocation ratios for carbon emission allowances. This issue is more urgent for China due to the uneven development across the country. This paper proposes a new method that divides low-carbon economy development processes into two separate periods: from 2020 to 2029 and from 2030 to 2050. These two periods have unique requirements and emissions reduction potential; therefore, they must involve different allocation methods, so that reduction behaviors do not stall the development of regional low-carbon economies. During the first period, a more deterministic economic development approach for the carbon emission allowance allocation ratio should be used. During the second period, more adaptive and optimized policy guidance should be employed. We developed a low-carbon economy index evaluation system using the entropy weight method to measure information filtering levels. We conducted vector autoregressive correlation tests, consulted 60 experts for the fuzzy analytic hierarchy process, and we conducted max-min standardized data processing tests. This article presents first- and second-period carbon emission allowance models in combination with a low-carbon economy index evaluation system. Finally, we forecast reasonable carbon emission allowance allocation ratios for China for the periods starting in 2020 and 2030. A good allocation ratio for the carbon emission allowance can help boost China’s economic development and help the country reach its energy conservation and emissions reduction goals.

Suggested Citation

  • Shihong Zeng & Jiuying Chen, 2016. "Forecasting the Allocation Ratio of Carbon Emission Allowance Currency for 2020 and 2030 in China," Sustainability, MDPI, vol. 8(7), pages 1-28, July.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:7:p:650-:d:73645
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