Optimization and Spatiotemporal Differentiation of Carbon Emission Rights Allocation in the Power Industry in the Yangtze River Economic Belt

Abstract

Reasonable allocation of carbon emission rights aids in the realization of the goal of carbon emission reduction. The purpose of this paper is to examine how carbon emission rights in the power sector in the Yangtze River Economic Belt (the YREB) are distributed. The YREB spans China’s eastern, central, and western areas. The levels of development and resource endowment differ significantly across regions, resulting in great heterogeneity in the YREB provinces’ carbon emission rights distribution in the power sector. The ZSG–DEA model is used in this paper to re-adjust the power sector’s carbon emission quotas in each province to achieve optimal efficiency under the country’s overall carbon emission reduction target. The results show that: (1) In most provinces, the power sector’s initial distribution efficiency is inefficient. Only Zhejiang and Yunnan have reached the production frontier, with Jiangxi and Chongqing having the lowest distribution efficiency. In the future, we should concentrate our efforts on them for conserving energy and lowering emissions; (2) The initial distribution efficiency of the power sector in the YREB’s upstream, midstream, and downstream regions is considerably different. Most upstream and downstream provinces have higher carbon emission quotas, while most midstream provinces have less, implying that the power sector in the midstream provinces faces greater emission reduction challenges; (3) The carbon emission quotas of the power industry varies greatly between provinces and shows different spatial features over time. In the early stage (2021–2027), the carbon emission quota varies substantially, while for the later stage (2027–2030), it is rather balanced. Zhejiang, Jiangsu, Sichuan, and Yunnan are more likely to turn into sellers in the market for carbon emission trading with larger carbon emission quotas. While Jiangxi and Chongqing are more likely to turn into buyers in the market for carbon emission trading with fewer carbon emission quotas. Other provinces’ carbon emission quotas are more evenly distributed. To successfully achieve China’s emission reduction target by 2030, the YREB should promote regional collaboration, optimize industrial structure, accelerate technical innovation, establish emission reduction regulations, and provide financial support based on local conditions.