Allocation scheme selection for transportation carbon allowance -evidence from China's top ten economic regions

Abstract

Establishing a scientific allocation scheme for transportation carbon allowance (TCA) is an inevitable requirement of China's sustainable development. Previous studies on the allocation problems of TCA considered the single goal, but this study constructs an allocation model of TCA under the framework of zero-sum gains data envelopment analysis and a spatial simultaneous panel. Furthermore, a profit maximization function model is used to measure the allocative efficiency and the differences in regional abatement costs of three different transport allocation mechanisms in China's top 10 economic regions from 1998 to 2019. Empirical results revealed four key results. (1) The efficient scheme is beneficial to regions with a high level of economic development and high-carbon emission efficiency, but it is easy to cause widening regional wealth disparities. (2) The equitable scheme is beneficial to regions with low transportation carbon emission efficiency, immature transportation structures, and green transportation technology, but it is easy to cause an unsuitable punishment effect. (3) Compared with the above two schemes, the comprehensive scheme is beneficial to more regions because it can both minimize the average marginal abatement costs and mitigate regional development inequalities. (4) With the gradual improvement of the national transportation carbon trading market, the comprehensive scheme is more sustainable and should be used more in the future. This study contributes to the formulation and implementation of energy allocation policies in the transportation sector.