Initial Provincial Allocation and Equity Evaluation of China’s Carbon Emission Rights—Based on the Improved TOPSIS Method

Abstract

As the world’s largest carbon emitter, China considers carbon emissions trading to be an important measure in its national strategy for energy conservation and emissions reduction. The initial allocation of China’s carbon emissions rights at the provincial level is a core issue of carbon emissions trading. A scientific and reasonable distinction between the carbon emission rights of provinces is crucial for China to achieve emissions reduction targets. Based on the idea of multi-objective decision-making, this paper uses the improved Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) method to allocate China’s initial carbon emission rights to the provinces and uses the Gini coefficient sub-group decomposition method to evaluate the fairness of the allocation results. First, the results of a theoretical distribution show that in the initial allocation of carbon emission rights, a large proportion of China’s provinces have large populations and high energy use, such as Shandong Province, Jiangsu Province, Hebei Province and Henan Province; the provinces with a small proportion of the initial allocation of carbon emissions consist of two municipalities, Beijing and Shanghai, as well as Hainan Province, which is dominated by tourism. Overall, the initial allocation of carbon emission rights in the northern and eastern regions constituted the largest proportion, with the south-central region and the northwest region being the second largest and the southwest region being the smallest. Second, the difference between the theoretical allocation and the actual allocation of carbon emission rights in China was clear. The energy consumption of large provinces and provinces dominated by industry generally had a negative difference (the theoretical allocation of carbon emissions was less than the actual value), while Qinghai, dominated by agriculture and animal husbandry, showed a positive balance (the theoretical allocation of carbon emissions was greater than the actual value). Third, the results based on the Gini coefficient showed that the carbon emission right allocation scheme proposed by the Topsis model in this paper has good fairness. Fourth, the economic development structure, technological innovation level, carbon emissions and other indicators have certain impacts on the fairness of the initial allocation of carbon emission rights. Finally, this paper offers some suggestions on energy conservation and emissions reduction in China, taking four aspects into account: regional disparities, technological innovation, industrial structure and the initial allocation of carbon emission rights. This paper could be helpful to provide a reference for the rational allocation of China’s carbon emission right.