Design of Combined Auction Model for Emission Rights of International Forestry Carbon Sequestration and Other Pollutants Based on SMRA

Hongpeng Guo,Qingyu Yu,Hongxu Yuan,Junyi Hua,Zhihao Lv

doi:10.3390/su132011200

Hongpeng Guo, Qingyu Yu + Show 3 more

Open Access

https://doi.org/10.3390/su132011200

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Journal: Sustainability	Publication Date: Oct 11, 2021
Citations: 2	License type: CC BY 4.0

Affiliation: Jilin Agricultural University, Jilin University

Abstract

In this paper, the combined transactions for emission rights of international carbon sequestration and other pollutants in forestry have been taken as the research object, and the Simultaneous Multiple Round Auction (SMRA) theory has been used to design a new model for the current auction transactions. In this paper, the feasibility and application of the SMRA model of reach object are studied by the methods of simulation experiment, model analysis, and analogical analysis, and the promotion of this model is discussed. The results show that the new auction model designed in this paper fills in the blank of the combined auction of international forestry carbon sequestration and other pollutant emission rights. It successfully eliminates the winners’ curse and the losses of the sellers. Meanwhile, it provides a new way of resolving ecological deficits problems, achieving the ultimate goal of an overall reduction in carbon and pollution emission. Moreover, it’s beneficial in resolving the structural contradictions between ecological purification and pollutants discharge, hence maximizing the benefits for all the stakeholders. Finally, it is suggested that the SMRA should be adopted in the international trading of emission rights of international carbon sequestration and other pollutants to promote the emission reduction of greenhouse gases and pollutants.

Highlights

We find that under the condition that the trading conditions such as commodities remain unchanged and the trading results are only affected by rule changes, Simultaneous Multiple Round Auction (SMRA) auction results in a higher proportion of transactions, a more stable price, and the corresponding buyers and sellers gain the most
This paper first proposed the application of the SMRA model to the auction and trading of international emission rights and carried out theoretical analysis and simulation experiment research
The results show that this combined auction model can integrate multiple emission trading markets, reduce transaction costs and improve transaction efficiency

Summary

Introduction

International forestry carbon sequestration trading is a hot spot of international carbon emission reduction and an important part of solving the global climate crisis, because forests can absorb carbon dioxide from the atmosphere. It is because of the contribution of carbon dioxide produced by deforestation and forest degradation to global emissions [2]. The use of emission permit trading systems continues to grow, this trading system is only suitable for uniformly mixed pollutants, so its application potential is still limited. The paid use price, transaction benchmark price, and government repurchase price in the initial distribution basically constitute the current situation of the paid use and transaction price system of the main pollutant emission rights in our country.

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