Abstract
To control growing environmental problems, the pollution rights trading (PRT) center was established in Jiaxing in 2007, and China officially joined the carbon emission reduction market (NCET) in 2011. Since power enterprises are the main participants in the NCET market and PRT market, the integrated effect of the NCET market and PRT market on power enterprise profit and the regional environment is one of the major issues that needs to be taken into consideration. Based on system dynamics (SD) theory, we propose an NCET-PRT simulation model for power enterprises in Chongqing. Through analyzing parameters of carbon trading price, free ratio, and emission trading prices, 12 different simulation scenarios are configured for sensitivity analysis. Based on the simulation results, the following observations can be obtained: (1) NCET and PRT can effectively promote the performance of enterprises’ carbon emissions reduction and regional pollutant emission reduction but will have a minor negative impact on the industrial economy at the same time; (2) The trading mechanism is interactive; if the carbon emissions trading (NCET) mechanism is implemented separately, the emission of pollutants will be reduced significantly. However, the implementation of pollution rights trading (PRT) alone cannot significantly reduce CO2 emissions; (3) At an appropriate level, NCET and PRT can be enhanced to achieve a maximum emissions reduction effect at a minimum economic cost.
Highlights
In recent years, with the development of Chinese industry and the growth of consumer levels, the economy has grown rapidly, and behind this economic development, the greenhouse effect and environmental pollution have been an unneglectable problem; the emission reduction of the electrical industry is its most critical part
For companies that implement carbon trading under the EU trading system, we find that enterprises with carbon emission allowances have higher profits than those without carbon emission allowances, and enterprises with high carbon emissions face higher carbon risks and higher expected benefits (Oestreich and Tsiakas [33])
As far as we know, the existing literature mainly focuses on the impact of a single emission reduction trading mechanism (CET or pollution rights trading (PRT)) on the economy and environment; there are few integrated analyses of carbon emissions trading (CET) and PRT for the power industry
Summary
With the development of Chinese industry and the growth of consumer levels, the economy has grown rapidly, and behind this economic development, the greenhouse effect and environmental pollution have been an unneglectable problem; the emission reduction of the electrical industry is its most critical part. Based on the theory of system dynamics, Liao et al [21] established the pollutant trading model in China and found that the impact of trading policies on the total emission control of SO has increased steadily since 2011. As far as we know, the existing literature mainly focuses on the impact of a single emission reduction trading mechanism (CET or PRT) on the economy and environment; there are few integrated analyses of CET and PRT for the power industry. We think it is a problem worth studying. Scuasrtbaionnabielimtyi2s0s1i9o,n11t,rxaFdOinRgPEinERthReEVpIoEwWer industry, to make the trading mechanism more effective 4inofth1e7 power industry
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