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Emissions trading and abatement cost savings: An estimation of China's thermal power industry

Author

Listed:
  • Ke Wang
  • Xian Zhang
  • Xueying Yu
  • Yi-Ming Wei

    () (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)

  • Bin Wang

Abstract

This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities CO2 emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO2, SO2, and NOx, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China.

Suggested Citation

  • Ke Wang & Xian Zhang & Xueying Yu & Yi-Ming Wei & Bin Wang, 2016. "Emissions trading and abatement cost savings: An estimation of China's thermal power industry," CEEP-BIT Working Papers 95, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
  • Handle: RePEc:biw:wpaper:95
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    Cited by:

    1. repec:eee:ejores:v:269:y:2018:i:1:p:35-50 is not listed on IDEAS
    2. repec:eee:streco:v:47:y:2018:i:c:p:180-193 is not listed on IDEAS
    3. repec:eee:rensus:v:98:y:2018:i:c:p:415-425 is not listed on IDEAS
    4. repec:gam:jsusta:v:10:y:2018:i:8:p:2895-:d:163873 is not listed on IDEAS
    5. Ke Wang & Yi-Ming Wei & Zhimin Huang, 2017. "Environmental efficiency and abatement efficiency measurements of China¡¯s thermal power industry: A data envelopment analysis based materials balance approach," CEEP-BIT Working Papers 108, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    6. repec:eee:enepol:v:125:y:2019:i:c:p:122-134 is not listed on IDEAS

    More about this item

    Keywords

    Data envelopment analysis; CO2 emissions; Regulatory rigidity; Synergy effect; Tradable permits;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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