Allocation of carbon emission permits in heterogeneous complex network systems: A DEA-based study among China’s industrial sectors

Abstract

The official proposal of China’s carbon peaking and carbon neutrality goals has made it necessary to accelerate the energy conservation and emission reduction process. The industrial system, as the main source of energy consumption and pollution emissions in China, should also undertake the emission reduction task. Allocation of emission permit (AEP) among industrial sectors should consider energy input heterogeneity as well as industrial energy intensity. Therefore, this paper extends the AEP model in complex network systems considering energy heterogeneity. The characteristics of this allocation model are as follows. (1) We extend the model to parallel network systems by considering energy consumption structure heterogeneity. (2) Industrial energy density is defined as a constraint for allocation according to realistic requirements. (3) We construct a multiobjective programming model that simultaneously considers maximizing output and minimizing energy inputs. Finally, we apply the model to CO2 emission reduction quota allocation among industrial sectors in China and provide empirical findings and policy implications.