Abstract

This paper explores the risk decision issue of the emission/right trading in power enterprises according to the various possible situations which may exist in the carbon trading system. Firstly, the emission environment is divided into three separate Cases and two combination (hybrid) Cases are virtualized. Secondly, the advantages and disadvantages for both the enterprises and the country are analyzed under the existing separate situation and the risk decision-making framework of the emission/right trading is established for the power generation companies. Finally, a trading risk decision model is constructed in the combination Cases by using the financial asset portfolio theory and the effective frontier for the model is given. The model is broad and simple in application scope. It has some theoretical meanings and practical values. And it provides the operational space for the risk decision of the power enterprises.

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