IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v37y2016i1_supplp129-152.html
   My bibliography  Save this article

The Economic Effects of Initial Quota Allocations on Carbon Emissions Trading in China

Author

Listed:
  • Jie Wu
  • Ying Fan
  • Yan Xia

Abstract

The emissions trading scheme has recently become an important emissions reduction mechanism in China. The initial quota allocation is one of the key points in its design, which includes the initial quota allocation criterion and allocation method. In this paper, we analyze the regional macroeconomic impacts of emissions trading in China under different quota allocation criteria and allocation methods using a multiregional computable general equilibrium (CGE) model. The results show that the Ability-to-Pay criterion is better than the other criteria, as it can lead to fewer macroeconomic costs and welfare losses; narrow the economic gap between the eastern, central and western regions; and guide investment into the western regions. Comparing free allocation and auction, it is determined that free allocation leads to lower macroeconomic costs, while auction is better at adjusting the industrial structure. This indicates that a hybrid allocation method is preferable.

Suggested Citation

  • Jie Wu & Ying Fan & Yan Xia, 2016. "The Economic Effects of Initial Quota Allocations on Carbon Emissions Trading in China," The Energy Journal, , vol. 37(1_suppl), pages 129-152, January.
    • Handle: RePEc:sae:enejou:v:37:y:2016:i:1_suppl:p:129-152
    DOI: 10.5547/01956574.37.SI1.jwu
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.37.SI1.jwu
    Download Restriction: no
    File URL: https://libkey.io/10.5547/01956574.37.SI1.jwu?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
    ---><---

    References listed on IDEAS

    as
    1. Peter Bohm & Bjorn Larsen, 1994. "Fairness in a tradeable-permit treaty for carbon emissions reductions in Europe and the former Soviet Union," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(3), pages 219-239, June.
    2. Cui, Lian-Biao & Fan, Ying & Zhu, Lei & Bi, Qing-Hua, 2014. "How will the emissions trading scheme save cost for achieving China’s 2020 carbon intensity reduction target?," Applied Energy, Elsevier, vol. 136(C), pages 1043-1052.
    3. Edwards, T. Huw. & Hutton, John P., 2001. "Allocation of carbon permits within a country: a general equilibrium analysis of the United Kingdom," Energy Economics, Elsevier, vol. 23(4), pages 371-386, July.
    4. Edmonds, Jae & Wise, Marshall & Barns, David W, 1995. "Carbon coalitions : The cost and effectiveness of energy agreements to alter trajectories of atmospheric carbon dioxide emissions," Energy Policy, Elsevier, vol. 23(4-5), pages 309-335.
    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. Lanlan Lian & Xiaojun Ma & Yimeng Wang & Qingli Dong, 2025. "Optimizing China’s carbon quota allocation for peak emissions: A novel AMLC framework tailored to regional dynamics," PLOS ONE, Public Library of Science, vol. 20(4), pages 1-24, April.

    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. Zhou, P. & Wang, M., 2016. "Carbon dioxide emissions allocation: A review," Ecological Economics, Elsevier, vol. 125(C), pages 47-59.
    2. Jie Wu, Ying Fan, Yan Xia, 2016. "The Economic Effects of Initial Quota Allocations on Carbon Emissions Trading in China," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    3. Liu, Yu & Tan, Xiu-Jie & Yu, Yang & Qi, Shao-Zhou, 2017. "Assessment of impacts of Hubei Pilot emission trading schemes in China – A CGE-analysis using TermCO2 model," Applied Energy, Elsevier, vol. 189(C), pages 762-769.
    4. Julien Lefevre, 2018. "Modeling the Socioeconomic Impacts of the Adoption of a Carbon Pricing Instrument – Literature review," CIRED Working Papers hal-03128619, HAL.
    5. Ziheng Niu & Jianliang Xiong & Xuesong Ding & Yao Wu, 2022. "Analysis of China’s Carbon Peak Achievement in 2025," Energies, MDPI, vol. 15(14), pages 1-18, July.
    6. Minxing Jiang & Bangzhu Zhu & Julien Chevallier & Rui Xie, 2018. "Allocating provincial CO2 quotas for the Chinese national carbon program," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), pages 457-479, July.
    7. Tang, Ling & Wu, Jiaqian & Yu, Lean & Bao, Qin, 2017. "Carbon allowance auction design of China's emissions trading scheme: A multi-agent-based approach," Energy Policy, Elsevier, vol. 102(C), pages 30-40.
    8. Wang, Xu & Zhu, Lei & Fan, Ying, 2018. "Transaction costs, market structure and efficient coverage of emissions trading scheme: A microlevel study from the pilots in China," Applied Energy, Elsevier, vol. 220(C), pages 657-671.
    9. Sun, Tao & Zhang, Hongwei & Wang, Yuan, 2013. "The application of information entropy in basin level water waste permits allocation in China," Resources, Conservation & Recycling, Elsevier, vol. 70(C), pages 50-54.
    10. Yuan, Qiang & McIntyre, Neil & Wu, Yipeng & Liu, Yichao & Liu, Yi, 2017. "Towards greater socio-economic equality in allocation of wastewater discharge permits in China based on the weighted Gini coefficient," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 196-205.
    11. Sun, Tao & Zhang, Hongwei & Wang, Yuan & Meng, Xiangming & Wang, Chenwan, 2010. "The application of environmental Gini coefficient (EGC) in allocating wastewater discharge permit: The case study of watershed total mass control in Tianjin, China," Resources, Conservation & Recycling, Elsevier, vol. 54(9), pages 601-608.
    12. GERMAIN, Marc & VAN STEENBERGHE, Vincent, 2001. "Constraining equitable allocations of tradable greenhouse gases emission quotas by acceptability," LIDAM Discussion Papers CORE 2001005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Hongbo Duan, Lei Zhu, Gürkan Kumbaroglu, and Ying Fan, 2016. "Regional Opportunities for China To Go Low-Carbon: Results from the REEC Model," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    14. Peter Bohm & Björn Carlén, 2002. "A Cost-effective Approach to Attracting Low-income Countries to International Emissions Trading: Theory and Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(2), pages 187-211, October.
    15. Hongbo Duan & Lei Zhu & Gürkan Kumbaroğlu & Ying Fan, 2016. "Regional Opportunities for China to Go Low-Carbon: Results from the REEC Model," The Energy Journal, , vol. 37(1_suppl), pages 223-252, January.
    16. Haoran Zhang & Rongxia Zhang & Guomin Li & Wei Li & Yongrok Choi, 2020. "Has China’s Emission Trading System Achieved the Development of a Low-Carbon Economy in High-Emission Industrial Subsectors?," Sustainability, MDPI, vol. 12(13), pages 1-20, July.
    17. Brown, Marilyn A. & Li, Yufei & Soni, Anmol, 2020. "Are all jobs created equal? Regional employment impacts of a U.S. carbon tax," Applied Energy, Elsevier, vol. 262(C).
    18. Cai, Yiyong & Newth, David & Finnigan, John & Gunasekera, Don, 2015. "A hybrid energy-economy model for global integrated assessment of climate change, carbon mitigation and energy transformation," Applied Energy, Elsevier, vol. 148(C), pages 381-395.
    19. Karp, Larry S. & Liu, Xuemei, 1998. "Valuing Tradeable Co2 Permits For Oecd Countries," CUDARE Working Papers 25054, University of California, Berkeley, Department of Agricultural and Resource Economics.
    20. Bin Ye & Jingjing Jiang & Lixin Miao & Ji Li & Yang Peng, 2015. "Innovative Carbon Allowance Allocation Policy for the Shenzhen Emission Trading Scheme in China," Sustainability, MDPI, vol. 8(1), pages 1-23, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:sae:enejou:v:37:y:2016:i:1_suppl:p:129-152. 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: SAGE Publications (email available below). General contact details of provider: .

    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.