Quota Allocation Research Articles

A two-tier bidding model considering a multi-stage offer‑carbon joint incentive clearing mechanism for coupled electricity and carbon markets

To facilitate the coupling of electricity and carbon markets, a two-layer bidding model considering a multi-stage offer‑carbon joint incentive clearing mechanism is proposed. The upper layer models the bidding strategies of renewable energy units and thermal power generating units, and the lower layer is the market clearing layer. A multi-stage offer‑carbon joint incentive clearing mechanism is proposed. In the pre-clearing stage, the environmental benefit factor of the carbon market is introduced to adjust the bidding strategy of the units, the carbon emission intensity enters the market in the form of price, the environmental benefit of the generating units is fully considered, and the carbon quota allocation model of units is established; in the second stage, carbon trading cost is added based on the pre-clearing model to further optimize the unit output; in the third stage, the clearing model with the minimum cost of electricity energy is established for tracking the clearing price. Under this mechanism, the carbon trading cost is traded on the market and unit offers are combined with carbon element to participate in market trading. Three bidding models with different clearing mechanisms are set up, and the results of the arithmetic example show that the proposed model can realize the balance between the economic and low-carbon goals of market clearing, and can achieve the maximum carbon emission reduction based on no increase in the total cost of electric-carbon coupling. As the share of renewable energy increases, the clearing price will decrease. A reasonable offer from renewable energy sources can avoid their interests being jeopardized. Concurrently, increasing the initial carbon price can effectively guide the electricity market to develop in a cleaner direction.

Symmetric Impact of Carbon Emissions on Poverty in South Africa: New Evidence from ARDL Bounds Test

The purpose of this study is to investigate the relationship between poverty and carbon emissions in South Africa covering the period between 1994 and 2020. The study employed the ARDL bounds test to assess the existence of a long run relationship between the variables. The results evidenced existence of a long run relationship between poverty, carbon emissions, economic growth and renewable energy consumption in South Africa. The results are such that carbon emissions have a positive and a significant effect on poverty in the long run. Therefore, with CO2 emissions having a positive influence on poverty, causes more losses in the socioeconomic system and reduces the ability of the population to cope with poverty. Therefore, it is recommended that the government should promote the growth of the South African carbon market, increase enterprise involvement through acceptable price and quota allocation, and work in tandem with other environmental measures to promote sustainable development. This will help alleviate poverty in South Africa.

Research on the allocation scheme of carbon emission allowances for China's provincial power grids

The power industry is the industry with the highest carbon emissions in China, and the rational allocation of carbon quotas for the power industry is the key to the rational allocation of carbon quotas in China, while the transfer of carbon emissions generated by inter-provincial power trading makes it difficult to calculate the carbon emission quotas for power. The article calculates the comprehensive power carbon quota for each province based on the principles of equity(PEQ) and the principles of efficiency(PEF). The results of the study prove the following points. (1) There are significant differences in the carbon emission factors calculated for electricity generation and consumption in each province. (2) The western provinces with abundant electricity resources deliver electricity to the eastern and southern provinces to ensure their economic development, so the western provinces with higher inflows of electricity carbon emissions bear the carbon emission pressure of the eastern and southern provinces. (3) The provincial electricity carbon quota calculated by the principle of comprehensiveness(PC) takes into account social equity and economic efficiency, and the calculation results are more reasonable. This study achieves balanced regional development by reasonably allocating provincial electricity carbon quotas.

Regulating Transgenic Soybean Production in Argentina: The Role of Agro-Associations

Argentina's economy is organized mainly around the export of transgenic soybeans. This production is associated with several environmental and social costs. This article investigates transgenic soybean production regulation possibilities, which fulfills efficiency, acceptability, and feasibility by directly controlling production levels. Production quota markets are promising because they make it possible to implement cost-effective production. However, Argentina's agricultural sector is organized into large agro-associations with significant political power. The exercise of market power could challenge the attractive properties of production quota markets. This article considers the possibility of these organizations manipulating the quota market to capture a larger share of production. The production quota market could give rise to "raising rivals' costs" behavior. Contrary to the existing literature, this article shows that this strategy is profitable, even though the price of transgenic soybeans is fixed on international markets. To restore efficiency in production levels while preserving policy acceptability, we propose to auction production quotas with an adequate rebate revenue. Alternatively, initial quota allocation can be hybrid. The initial allocation chosen will depend on the trade-off between efficiency and acceptability of the environmental policy. Thus, while proposing a specific and adapted regulation for transgenic soybeans in Argentina, this article contributes to the knowledge of tradeable production quotas, which are almost less analyzed in the economic literature.

Toward Sustainable Fishing Practices in Indonesia: Defining a Catch Quota Allocation for Saddletail Snapper (Lutjanus Malabaricus) in the Arafura Sea

The Arafura Sea hosts the commercially significant fish species, Lutjanus malabaricus, commonly known as the saddletail snapper. We devised a quota allocation approach for sustainably capturing this species. This approach involved estimating the species’ life history parameters through calculations of the size at 50% maturity, as well as life history ratios (M/K and Lm/L∞) to figure out the Total Allowable Catch (TAC). We based our calculations on the Maximum Sustainable Yield (MSY) that came from the catch and landing data from Probolinggo Port. This helped us set a fishing quota that fits the situation in Indonesia. Our analysis revealed that the size at 50% maturity was 52 cm, slightly lower compared to the neighborhood waters. Using the Length Based-Spawning Potential Ratio (LB-SPR) model, we determined the stock’s SPR to be approximately 17%, which falls below the targeted healthy fish stock SPR reference of 40%. The estimated MSY stood at 2,307 tons, and the TAC calculation slightly exceeded the approach based on time series fitting. Given the notably low SPR estimate, we suggest a cautious approach, recommending an MSY of 2,307 tons per year for Probolinggo Port, emphasizing the importance of maintaining the fishing mortality rate within the sustainable threshold.

Green technological licensing strategies with fixed-fee among rival firms under emissions trading scheme

This paper considers no-licensing, unilateral licensing, and cross-licensing strategies among rival firms with different green technologies under emissions trading scheme. We mainly focus on the impact of green technological licensing strategies on firms’ operational management from a business perspective by considering different carbon quota allocations. It is shown that the green technological licensing strategy is always a preferred strategy in globally optimal sense when the technological gap and emission improvement are lower than some thresholds; if firms’ bargaining powers are within a certain range, the green technological licensing strategies can realize a Pareto improvement; the equilibrium decisions have a certain degree of robustness under random perturbation. To improve the performance of green technological licensing models, we introduce revenue-sharing contracts into the green technological licensing negotiation processes and show that, if the better-off firms agree to transfer a certain portion of their revenues, revenue-sharing contracts can increase the total profits of firms and are profitable for all parties. From an economic and environmental perspective, green technological licensing strategies can promote sustainable social development, while revenue-sharing contracts can significantly increase the incentive for rival firms to license green technologies.

Research on the Impact of Carbon Emission Trading Market on Regional Economic Development: A Case Study of East China

This article delves into the impact of carbon emission trading mechanism on regional economy, especially in East China, and focuses on analyzing how this mechanism promotes green transformation and high-quality development of the economy by influencing green technology innovation of enterprises. Research has found that carbon emission trading not only incentivizes companies to reduce greenhouse gas emissions, but also guides capital and technological innovation to flow towards low-carbon areas through market mechanisms, thereby promoting the optimization of industrial structure and sustainable economic development. This article also discusses the impact of different quota allocation methods on green innovation in enterprises, pointing out that the benchmark method can more effectively stimulate the innovation drive of enterprises compared to the historical method. Therefore, according to the research findings, it is necessary to improve the construction of carbon markets, scientifically formulate quota allocation systems, avoid negative impacts on early green innovation enterprises, and provide policy support to reduce innovation costs for enterprises.

Study on the Initial Allocation of Carbon Emission Rights Applicable to China's National Conditions: from the Perspective of Comprehensive Principles

<p>The scientific and reasonable allocation of initial carbon emission rights is the foundation of establishing and perfecting the carbon trading system, which is directly associated with the completion of carbon emission reduction targets. Guided by the rational distribution of China's carbon emission rights, this paper adopts a multi-index method to investigate the initial distribution of China's carbon emission rights from a regional perspective according to the comprehensive principles of fairness, efficiency, sustainability, and environmental capacity limit. The results show that the use of regional historical carbon emissions or economic factors as a single indicator of carbon emission rights distribution is unreasonable according to historical emissions or GDP, and the results are quite different from the actual demand. Under the overall coordination degree allocation model, it is reasonable for Region 2, Region 3, and Region 4 to undertake higher emission reduction responsibilities, and the emission reduction tasks in these regions are likely to be completed, which shows that the carbon emission rights allocation under the comprehensive principle is more in line with the actual demand and has good operability, robustness, and compatibility. The allocation of carbon emission quota requires the scientific and reasonable formulation of the total national allocation, that all provinces and cities can form a stable quota expectation, effectively design the allocation principle scheme, give consideration to fairness and operability, and do not share the responsibility of regional emission reduction with a one-size-fits-all approach.</p>

Research on Carbon Allowance Allocation Mechanism in Oligocompetitive Industries under Carbon Trading

In response to global warming, countries have implemented measures to control greenhouse gas emissions. The government's choice of carbon quota allocation mechanism is crucial to the effectiveness of emission reduction and control. This paper presents a master-slave game model where the government leads and the oligopolistic competitors follow. The aim is to explore the conditions under which the government chooses the allocation mechanism, providing managerial insights for the government's allocation of quotas.

Research on China’s regional carbon quota allocation based on the entropy weight-TOPSIS method and CRITIC-VIKOR model

Research on China’s regional carbon quota allocation based on the entropy weight-TOPSIS method and CRITIC-VIKOR model

Opportunity or trap - the policy effect of China’s energy quota trading

ABSTRACT This paper assesses the policy effect of the energy quota trading (EQT) policy from the perspectives of energy consumption, economic growth, and energy intensity, based on the panel data of 30 provinces in China from 2006 to 2019. The energy intensity has been decomposed into technical effect and structural effect using the LMDI model. The triple difference method, the corresponding parallel dynamic trend test and the placebo test are employed in this study. The result suggests that the EQT policy is capable of suppressing the growth of energy consumption, and will not dampen economic growth. Moreover, the policy facilitates the decrease of energy intensity in China. The EQT policy has spurred energy technology innovation, improved energy efficiency, and exerted about innovative compensation effects. However, the initial allocation of energy quota is free, thus leading to the structural effect of enterprises converging to high-energy-consumption industries. Compared with the white certificate policy, the EQT policy has some defects in the regulatory mechanism and operating rules. It is imperative for the policymakers to formulate guiding policies when considering the policy shocks of the above low industrialization area on the rapidly developing country.

The current status of the Lena-Olenek population of wild reindeer (<i>Rangifer tarandus</i> L., 1758, Cervidae, Artiodactyla)

The rational use of wild reindeer (Rangifer tarandus L., 1758) based on reliable data on the number, distribution, age-sex composition, and herd size of the population is a challenging problem for hunting management. The purpose of this study was to characterize the current state of the Lena-Olenek tundra wild reindeer (LOWR) population. The counting of LOWR was based on the aerial census conducted from July 10 to 12, 2018; coordinate data from the GLONASS/Argos satellite tracker collars; stock materials from previous aerial surveys in the tundra of Yakutia. From the data obtained, the livestock of the LOWR was estimated to be 83,260. We specified that deer are housed in three distinct groups: broodstock, mixed, and male. The main livestock in the LOWR were females (44.2 %), calves (22.4 %), and juvenile animals 1–2 years old (17.5 %). Over 32 years, there was a decrease in 62.2% in the number of adult males and an increase in the number of fingerlings and juvenile animals. Since the middle of the last century, there has been a gradual increase in the number of LOWR from 21,000 to 95,000 deer in 2009 and a slight decrease to 83,200 deer in the last decade due to the exclusion of Taimyr reindeer migrants. The results of this study can be used to rationalize the use of wild reindeer resources and the allocation of quotas for production. Further census work will make it possible to monitor the state of the population over time.

Research on the legal regulation and improvement of carbon emission trading

Carbon emission trading system is a kind of environmental institutional arrangement to solve externalities through market mechanism, which is one of the most effective ways to deal with climate change in China and to control air pollution represented by haze pollution. In accordance with the requirement of "using system to protect ecological environment", China should position carbon emission trading system as the basic legal system of environmental protection in the new Environmental Protection Law, and from the aspects of reasonable determination of total carbon emission control mechanism, allocation of carbon emission trading quota, selection of pricing mechanism, and improvement of government supervision mechanism, etc. To improve China's emissions trading system.

Study on China’s 2030 provincial carbon quota allocation scheme considering the positive and negative effects of historical emissions

The carbon quota allocation scheme serves as the fundamental backbone for ensuring the smooth and sustainable operation of the carbon market. Despite numerous prior studies, ongoing debates persist regarding the impact of historical emissions, both positive and negative, on carbon quota allocation. Utilizing the four indicators of historical emissions (both positive and negative), egalitarianism, payment capability, and emission efficiency, this paper employs the entropy method to develop 22 distinct carbon quota allocation plans tailored for China’s provincial regions in the year 2030. Subsequently, utilizing the shadow price method, the study calculates the emission reduction costs of each province under each allocation scheme, thereby evaluating the carbon quota plans from the perspective of emission reduction costs. Finally, a comparative analysis is conducted to assess the impact of both positive and negative historical emissions on the carbon quota allocation scheme, and the paper identifies the carbon quota allocation approach that minimizes the overall emission reduction cost for China. The findings suggest that: 1) allocating more allowances to provinces with higher historical emissions can effectively reduce emission reduction costs for each province; 2) the most cost-effective option for carbon quota allocation is a scheme that takes into account both egalitarian and historical emission criteria; 3) in order to further decrease the overall cost of emissions reduction, it is crucial to achieve comprehensive coverage of the carbon market and facilitate inter-provincial carbon quota trading.

Data‐driven allocation of renewables quota among regional power industries under the policy of renewable electricity standard

AbstractChina is struggling to facilitate the application of renewable portfolio standards to realize sustainable economic growth. As such, improving the current distribution mechanism is crucial. In this paper, the context‐dependent data envelopment analysis and multi‐objective linear programming are combined to allocate the renewables quota for each province. This integrated approach can maximize total electricity generation while minimizing the total CO2 emission with considering the disparity of production technology level. Then, the extended Gini coefficient is employed to assess the fairness of new quota mechanism. We find that (1) the eastern region is the most efficient during the power generation process. During 2016–2019, the efficiency in the western region presents an upward trend. (2) The allocation results indicate that Inner Mongolia and Qinghai have the greatest pressure to absorb renewable energy electricity, while Guangdong and Guizhou can instead reduce the most. Shandong and Inner Mongolia face the greatest burden in conserving non‐renewable electricity. (3) Compared to 2020, the newly allocated scheme can mitigate inequality, with the Gini coefficient changing from 0.264 in 2020 to 0.248 after the allocation. Meanwhile, the reallocation reduces the Gini coefficient related to renewable electricity, non‐renewable electricity, and CO2 emissions by 0.003, 0.028, and 0.073, respectively at the 2020 level.

Power Generation Mix Optimization under Auction Mechanism for Carbon Emission Rights

As the international community attaches importance to environmental and climate issues, carbon dioxide emissions in various countries have been subject to constraints and limits. The carbon trading market, as a market tool to reduce greenhouse gas emissions, has gone through a development process from a pilot carbon market to a national carbon market in China. At present, the industries included in the national carbon market are mainly the electric power industry, and the carbon emissions of the electric power industry account for about 40% of the national carbon emissions. According to the construction history of foreign carbon markets, China’s future carbon quota allocation will gradually transition from free allocation to auction allocation, and the auction mechanism will bring a heavy economic burden to the electric power industry, especially the thermal power generation industry. Therefore, this study takes Guangdong Province as an example to optimize the power generation mix with the objective of minimizing the total economic cost after the innovative introduction of the carbon quota auction mechanism, constructs an optimization model of the power generation mix based on the auction ratio by comprehensively applying the system dynamics model and the multi-objective linear programming model, systematically researches the power generation structure under different auction ratios with the time scale of months, and quantitatively evaluates the economic inputs needed to reduce the greenhouse gas emissions. The results of the study show that after comprehensively comparing the total economic cost, renewable energy development, and carbon emissions, it is the most scientific and reasonable to set the auction ratio of carbon allowances at 20%, which achieves the best level of economic and environmental benefits.

Optimal carbon quota allocation for a capital-constrained e-commerce supply chain under the carbon rights buyback policy

This paper examines the optimal choices of carbon quota allocation methods for members of a capital-constrained e-commerce supply chain that obtains financing through carbon rights buyback. Considering two carbon quota allocation methods, namely the grandfathering system and the benchmarking system, this paper constructs and solves a game model with two cycles in which an e-commerce platform dominates a manufacturer that produces ordinary products and low-carbon products in the two cycles, respectively, examines the impacts of the carbon emissions reduction coefficient, carbon emissions benchmark coefficient, carbon price, and carbon saving on e-commerce supply chain decisions, derives the optimal carbon quota allocation method for each supply chain member under different carbon savings, and finally conducts numerical studies to verify the analytical findings. The study shows that: (1) The grandfathering system is more suitable for manufacturers with low carbon savings, and the benchmarking system is more suitable for manufacturers with high carbon savings. (2) The supply chain system and members prefer different quota allocation methods under different conditions. The e-commerce platform prefers the benchmarking system when the carbon emissions benchmark coefficient is high; otherwise, it chooses the grandfathering system. The manufacturer and the e-commerce supply chain prefer the benchmarking system when the carbon saving is high; otherwise, they prefer the grandfathering system. (3) The grandfathering carbon quota allocation method can more effectively facilitate capital financing for capital-constrained manufacturers.

Optimization model of low-carbon technology adoption timing for coal power under decarbonization and flexibility demand: Empirical study in Beijing-Tianjin-Hebei region, China

Substituting renewable energy for coal power under the carbon neutrality goal is an inevitable path for power system transformation, while the high share of renewable energy leads to a rapid rise in system flexibility demand. Currently, coal-fired power is still one of the most economical and reliable large-scale flexible resources in China. Therefore, the issue of how to mitigate the conflict between cleanliness and flexibility for coal-fired power is urgent to be solved. Accordingly, this paper established an optimization framework for the retirement and technology adoption of coal-fired power units with high spatial-temporal resolution, and the regional carbon emission budget is estimated from a top-down perspective. Secondly, a dynamic carbon quota allocation method considering technological innovation and adoption is proposed. The carbon trading cost of the units is evaluated from a bottom-up perspective, to realize the interaction between the obligatory policy constraints of the top-level target and the flexible incentives of the market mechanism. Finally, the empirical analysis was conducted in the Beijing-Tianjin-Hebei region of China. The optimal solution achieved by proposed method results in a substantial 27% reduction in total costs while keeping the increase in carbon emissions below 3%. By analyzing the dynamic evolution path of coal and the scale of diffusion of multi-type technologies, the differences in the roles coal power assuming at various stages of decarbonization are discussed. The robustness of the model and the validity of the proposed method were verified by comparing the dynamic/static carbon quota allocation. Overall, this study provides an effective optimization model for investigating the low-carbon technology adoption timing for coal power in Beijing-Tianjin-Hebei region, and offers valuable insights for other coal-dominated emerging economies seeking for power system transformation roadmap in the forthcoming net-zero carbon age.

The newsvendor problem with GHG emissions from waste disposal under cap-and-trade regulation

We study a newsvendor problem with greenhouse gas (GHG) emissions at the disposal stage regulated by a cap-and-trade policy. We first consider a synchronous version of the problem where the replenishment period and the emission assessment period are the same. For this problem, we propose simple algorithms to derive the optimal quantity and cost for both continuous and discrete demand distributions. We show that ignoring the carbon tax may lead to large overcost, especially when the GHG quota is small. For a normally distributed demand, we also show that the demand standard deviation has a non-linear and non-monotonic effect on the order quantity. We then investigate an asynchronous version of the problem where replenishment decisions occur at a higher frequency than the quota allocation. We formulate this lot sizing problem as a Markov decision process and solve it with a dynamic programming algorithm whose complexity is assessed. Through a numerical experimentation and theoretical results, we demonstrate how and when the flexibility of the optimal dynamic replenishment decisions allows to reduce costs. When approaching the end of the time horizon, the uncertainty reduction allows the decision maker to adopt a riskier policy and order larger quantities.

How does the carbon trading scheme promote the decarbonization of China’s power sector?

Evaluating the effect of the carbon emissions trading scheme (ETS) on the decarbonization of the power sector is a basic task in the construction of China’s ETS. We use the energy flow relationship between the power and heat sectors to develop a more accurate accounting framework for CO2 emissions in the power sector and employ the difference-in-differences method to evaluate the impact of China’s ETS on CO2 emissions in the power sector and its dynamic effect. On this basis, we explore the mechanisms by which the ETS facilitates the decarbonization of the power sector, as well as its heterogeneous impacts. We find that the ETS has significantly promoted the decarbonization of the power sector, reducing its CO2 emissions in the pilot provinces by approximately 24.53 Mt compared to the non-pilot provinces. The decarbonization effect of the ETS was continuous and strengthened. In addition, the ETS promotes decarbonization of the power sector through technological advances in power generation and electricity utilization. Finally, the ETS’s decarbonization effect on the power sector is influenced by the heterogeneity of regions, carbon prices and quota allocation methods. Our findings have beneficial implications for the construction of carbon markets in the context of carbon neutralisation and carbon peaking.