Carbon emissions quota allocation based equilibrium strategy toward carbon reduction and economic benefits in China's building materials industry

Abstract

Abstract The rapid urbanization in China over the last decade has resulted in increased carbon emissions from the building materials industry. This paper seeks to reach a trade-off between economic benefits and carbon emissions in the building materials industry by integrating a carbon emissions quota allocation (CEQA) based equilibrium strategy under a carbon emissions trading (CET) mechanism that fully considers the stakeholder relationships between the regional authority and the building materials suppliers. An interactive solution approach with fuzzy random variables (FRVs) is designed to determine the trade-off between these decision makers. The methodology is then applied to a real world case to demonstrate its practicality and efficiency. Comprehensive discussions under different policy control scenarios and comparative analysis of two carbon reduction policies are conducted to assist policy makers. It was found that the proposed methodology encouraged building materials suppliers to adjust their production and carbon emissions quota purchase plans, further assisting regional authority to control the industry's emissions performance by providing a “win-win” solution for the regional authority and suppliers when making logical economic-environmental trade-off decisions.