Abstract
China’s nationwide emission trading scheme (CN-ETS) is scheduled to be launched in 2017. It is of great urgency and necessity to obtain a good understanding of the participating sectors of CN-ETS in terms of energy utilization and CO2 emissions. In this regard, it should be noted that the findings may be biased without taking industry heterogeneity into consideration. To this end, a meta-frontier framework with the directional distance function is employed to estimate the CO2 emission performance (CEP), mitigation potential (MP), and marginal abatement cost (MAC) at sector levels under the meta-frontier and the group-frontier. The results indicate that significant disparities in the CEP, MP, and MAC exist under both frontiers among various sectors, and the sectoral distributions of CEP, MP, and MAC are found to be different between the two frontiers. Additionally, the differences between the two frontiers in terms of CEP, MP, and MAC are considerable, and exhibit unequal distributions among these sectors. Notably, MAC under both frontiers and the difference between them are found to be significantly correlated with the carbon intensity. Finally, policy implications are provided for the government and participating enterprises, respectively.
Highlights
With climate change becoming an increasingly serious issue, the reduction of carbon dioxide (CO2) emissions has attracted extensive attention worldwide
We investigate the sectoral distributions of CO2 emission performance (CEP), mitigation potential (MP), and marginal abatement cost (MAC) under both frontiers, and analyze the differences between the two frontiers at sector levels
We first report the estimates of directional distance function (DDF) values (β), CO2 emission performance (CEP), mitigation potential (MP), and marginal abatement cost (MAC) under the meta-frontier and group-frontier at group levels
Summary
With climate change becoming an increasingly serious issue, the reduction of carbon dioxide (CO2) emissions has attracted extensive attention worldwide. In order to achieve the above international commitments for mitigating CO2 emissions, China’s National Development and Reform Commission (NDRC) has launched seven pilot emission trading schemes (ETS) since 2013 [5], which are located in Shenzhen, Guangdong, Shanghai, Beijing, Tianjin, Chongqing, and Hubei. These regional carbon markets are considered as experimental explorations for the establishment of China’s nationwide emission trading scheme (CN-ETS), which is scheduled to be launched in 2017. It is reported the CN-ETS will cover seven emission-intensive industries, including paper making, electricity generation, metallurgy, non-ferrous metals, building materials, the chemical industry, and the aviation service industry [6]
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