Abstract
In order to realize the national carbon intensity reduction target, China has decided to establish a unified national carbon emissions trading market in 2017. At the initial stage, eight industrial sectors will be covered in the carbon market and the other industrial sectors will be included gradually. The aim of this paper is to study the issue of how to allocate the carbon emissions quotas among different industrial sectors fairly and effectively. We try to provide theoretical support for how to determine the coverage scope and access order of the carbon market. In this paper, we construct a comprehensive reduction index based on indicators of equity and efficiency principle. We adopt entropy method to get the objective weights of the three indicators. Then, an allocation model is developed to determine each sector’s reduction target for the year of 2020. The result shows that our allocation scheme based on entropy method is more reasonable, and our allocation method will promote the equity of carbon quotas allocation and the efficiency of carbon emissions. With consideration of China’s current economic situation and industrial background, we discuss some policy implications regarding the construction of carbon market.
Highlights
Since the Kyoto protocol came to effect in 2005, both developed countries and developing countries around the world have made much effort to reduce greenhouse gas emissions
The Allocation Results Based on Entropy Method
To complete the emission intensity reduction commitment, the Chinese government is preparing for the establishment of a unified carbon emissions trading market, which will cover different industrial sectors gradually
Summary
Since the Kyoto protocol came to effect in 2005, both developed countries and developing countries around the world have made much effort to reduce greenhouse gas emissions. At the Paris climate conference in 2015, China once again made a commitment to reduce carbon intensity by 60%–65% in 2030 based on the level of 2005 [3]. Based on the experience of EUETS and China’s seven pilots, China’s National Development and Reform Commission (NDRC) claims that China will establish a unified national level carbon emission trading market in 2017. It is expected this market will become the largest carbon emission trading market in the world. We study how to allocate the carbon intensity reduction burdens among 35 industrial sectors according to three indicators based on equity and efficiency principle.
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