Carbon Quota Research Articles

Study on the Initial Carbon Quota Allocation Scheme of Provincial Regions in China from the Perspective of Responsibility and Goal, Fairness and Efficiency

China's commitment to identifying national carbon reduction targets is an essential topic. This study focuses on carbon quota allocation in China's unified carbon market under the principles of both equity and efficiency. First, we develop a carbon Gini coefficient to reflect the allocation equity and an emission abatement cost function to measure efficiency, respectively, which we further introduce as objectives into a multi-objective nonlinear programming model to obtain the optimal allocation. Second, we determine the optimal weights for the indicators constituting the comprehensive index, avoiding subjectivity in weight setting. Third, we calculate the provincial carbon intensity reduction burdens as well as the optimal carbon emission quos for 30 provinces in China, which has significant policy implications for the establishment of a unified national carbon market. Based on our results, we make four policy recommendations related to the construction of the national unified market. Our research not only contributes to the progress of existing literature on the methodology of regional allocation of carbon quotas, but also has a special interest for policy makers

Effects of ocean acidification on the growth, photosynthetic performance, and domoic acid production of the diatom Pseudo-nitzschia australis from the California Current System

Pseudo-nitzschia australis (Frenguelli), a toxigenic pennate diatom capable of producing the neurotoxin domoic acid (DA), was examined in unialgal laboratory cultures to quantify its physiological response to ocean acidification (OA) - the decline in pH resulting from increasing partial pressure of CO2 (pCO2) in the oceans. Toxic blooms of P. australis are common in the coastal waters of eastern boundary upwelling systems (EBUS), including those of the California Current System (CCS) off the west coast of the United States where increased pCO2 and decreased seawater pH are well-known. This study determined the production of dissolved (dDA) and particulate DA (pDA), the rates of growth and nutrient (nitrate, silicate and phosphate) utilization, cellular elemental ratios of carbon and nitrogen, and the photosynthetic response to declining pH during the exponential and stationary growth phases of a strain of P. australis isolated during a massive toxic bloom that persisted for months along much of the U.S. west coast during 2015. Our controlled lab studies showed that DA production significantly increased as pCO2 increased, and total DA (pDA + dDA) normalized to cell density was 2.7 fold greater at pH 7.8 compared to pH 8.1 (control) during nutrient-limited stationary growth. However, exponential growth rates did not increase with declining pH, but remained constant until pH of 7.8 was reached, and then specific growth rates declined by ca. 30%. The toxin results demonstrate that despite minimal effects of OA observed during the nutrient-replete exponential growth phase, the enhancement of DA production, notably the 3-fold increase in particulate DA per cell, with declining pH from 8.1 to 7.8 during the nutrient-depleted stationary phase, supports the hypothesis that increasing pCO2 will result in greater toxic risk to coastal ecosystems from elevated ambient concentrations of particulate DA. The ecological consequences of decreasing silicate uptake rates and increasing cellular carbon quotas with declining pH may potentially ameliorate some negative impacts of OA on Pseudo-nitzschia growth in natural systems.

Regional emission pathways, energy transition paths and cost analysis under various effort-sharing approaches for meeting Paris Agreement goals

International climate policy debate has been struggling to define an agreeable principle for just distribution of the burdens of reducing greenhouse gases. By the integrated assessment modeling, we investigate climate change mitigation pathways compatible with the Paris Agreement goals under different carbon budget allocation principles, namely, cost-effectiveness, equality, and grandfathering for 11 world regions. The results indicate that regional carbon quotas remain similar under equality and grandfathering principles, except for regions with a high population projection, i.e., Sub-Saharan Africa and South Asia, or regions with a high level of current emissions, such as North America. Irrespective of the burden-sharing principles, most world regions must reach carbon neutrality before 2070 to meet the 2 °C climate targets. Moreover, carbon emissions reduced by carbon capture and storage applications are found to peak around 2050. In general, the share of fossil fuels in primary energy is larger under the larger carbon quota, which will also increase carbon capture and storage applications in fossil fuels. The average global investment needs for mitigating climate change are the lowest under the cost-effectiveness principle, and the marginal abatement cost is the same for all regions. For each region, as the carbon quota decreases the marginal abatement cost increases, while the energy investment changes independently from the carbon quota. These insights can inform global climate change negotiations and help policymakers formulate timelines for carbon neutrality, energy transition, and technology deployment and investment portfolios.

Newsvendor’s optimal decisions under stochastic demand and cap-and-trade regulation

Cap-and-trade regulation (CTR) is universally considered as one of the most environmentally friendly approaches to reducing carbon emission. In this paper, the newsvendor with a warranty service is regarded as the benchmark model firstly. Then, we study extended models about the newsvendor’s carbon footprint under CTR in the carbon trading market. Specifically, the carbon footprint exists in the four stages: production, sale, residual disposal, and return warranty service. And we adopt low-carbon technologies to improve the carbon footprint. Thirdly, we derive the newsvendor’s optimal production quantity, emission abatement level, and the expected profit. Interestingly, improving the carbon footprint in the sale and return warranty stages leads to a sharply higher profit in the carbon trading market. Finally, results and discussion are addressed in detail by numerical examples. We discover that optimal production quantity with an improved carbon footprint is larger than that with an original carbon footprint and earns more. Besides, the warranty service cost is negatively related to both the newsvendor’s optimal production quantity and profit. In the carbon trading market, the newsvendor is supposed to improve carbon footprint by carbon reduction investment. Besides, carbon quotas provided by the government do no affect the optimal production quantity but affects the profit of carbon trade.

Optimal freshness and carbon abatement decisions in a two-echelon cold chain

Due to both carbon policy and consumer environmental awareness, the large amount of carbon emissions generated while keeping deteriorating products fresh has attracted attention. In particular, under international competition, both freshness and environmental friendliness have significant effects on the market demand for deteriorating products. Furthermore, considering harmonious economic and environmental development, many recent studies take social welfare as the optimization goal. However, due to the trade-offs between the freshness and environmental friendliness of deteriorating products, how should the government formulate a reasonable carbon policy to guide cold chain members to make optimal decisions on freshness-keeping efforts and carbon abatement to improve social welfare and reduce carbon emissions? Against this backdrop, in this study, considering cap-and-trade regulations and consumers’ preference for low-carbon fresh products, we develop tripartite game models consisting of the government, one emission-dependent supplier and one retailer in a two-echelon cold chain system. Two models are developed to compare the optimal decisions under two scenarios: when the supplier purchases carbon quotas and when the supplier adopts carbon abatement technology. Conducting theoretical analysis and numerical experiments, we obtain the following main insights: (1) The adoption of carbon abatement technologies does not always create greater social welfare, and there is a boundary between the two scenarios. (2) Production costs and freshness-keeping costs have the greatest influence on social welfare and unit carbon emissions. (3) The government should implement a looser carbon policy for deteriorating products with higher price elasticity. (4) The most effective way to simultaneously improve social welfare and reduce total carbon emissions is to increase consumer environmental awareness and reduce the abatement cost exponent.

Is carbon regulation better than cash subsidy? The case of new energy vehicles

New energy vehicles (NEVs) are welcomed by both policymakers and consumers because of their energy saving and low carbon properties. However, due to their high production cost and limited cruising range, the development of the NEV industry relies heavily on governments’ cash subsidy (CS) programs. At the same time, policymakers in several countries, including the United States (California) and China, have introduced carbon regulation (CR) to re-energize the NEV market. CS and CR have different impacts on the consumer and production sides. To this end, we propose a hybrid model combining the advantages of both. Through this model, the impacts of different interventions on product demands, profits, carbon emissions and technology R&D are derived: (1) CS always increases the demand for NEVs, while CR promotes NEVs only when NEVs are emission saving; providing CS increases the profits of the supply chain members, but supply chain profits under CR show uncertain trends; (2) CS reduces total emissions only if the unit carbon emission of NEVs is small enough, and the effect of NEVs’ carbon quota on total emissions under CR shows a similar trend, whereas the impact of carbon price on total emissions under CR depends on specific thresholds. Further results show that when a customer values NEVs highly, the proposed hybrid model produces the lowest total emission; (3) Optimal technology R&D for the cruising range of NEVs increases under CS if the subsidy provided is based on the actual cruising range; otherwise, CR performs better. The hybrid model shows potential in outperforming the other two policies in terms of the optimal technology R&D; (4) Supply chain integration decreases the optimal technology R&D in the case of CR, whereas in the case of CS, technology R&D does not vary with integration or decentralization of the supply chain.

Production decision-making system for manufacturing enterprises constrained by carbon reduction policies

This paper studies the optimal low carbon production decision system with considered the constraints of carbon emission reduction policy for manufacturing enterprises producing two kinds of products in the free market. Firstly, The research proved the optimal production combination exists and it is unique under the carbon emissions limits, and next, the research analyzed the low-carbon production decision-making system in three situations, which are carbon emission trade decision, green technology input decision, and joint decision. The research results showed that carbon emission permits trade can increase more flexibility to manufacturing enterprises and increase their profits as well. However, the carbon emissions limits set by the government would have an important impact on the production decision system of manufacturing enterprises. Carbon emission permits trade and green technology investment can optimize and improve the production decision system of manufacturing enterprises to a certain extent. Meanwhile, the government's scientific and reasonable formulation of initial carbon quotas would mobilize the enthusiasm and initiative of manufacturing enterprises to participate in carbon emission reduction. The government should also guide and encourage enterprises to invest in and develop low-carbon emission reduction technologies through tax relief, so as to improve carbon emission reduction technologies and its innovations to reduce carbon dioxide emissions.

The effectiveness and heterogeneity of carbon emissions trading scheme in China.

Some developed economies have run emission trading scheme (ETS) to mitigate carbon emissions. However, we know little about the effectiveness and heterogeneity of ETS in a context of developing economy. This paper evaluates the effectiveness and heterogeneity of China's pilot ETS, the first ETS run in a developing economy. Difference-in-difference (DID) and difference-in-difference-in-difference (DDD) methods are employed to analyze provincial industrial-level data. The heterogeneity of ETS effects is also explored from regional and industrial perspectives. The empirical results show that the pilot ETS can effectively reduce pilot industries' carbon emissions. The reduction effect of the pilot ETS has a substantial heterogeneity for different pilot provinces and industries. Carbon emissions are reduced by the pilot ETS through technological innovation and the adjustment of industrial structure. The empirical results suggest that policymakers may consider establishing a national ETS and differentiating carbon quota allowance in covered regions and industries in the current pilot ETS.

The use of degraded peatlands for biomass production

The goal of this research is an assessment of the possible use of peatlands biomass and straw for the production of mixed bio-pellets. Peaty soils are a specific type of soils formed as the result of wetlands drainage. Peat mining is completed by the factory if the layer of the peat is less than 1-2 meters and not enough deep for effective mechanical excavation. After the peat excavation is finished, the biggest problem is the use of these lands for other purposes. One of the perspective directions is rewetting of post-mining peatlands to stimulate the growth of common reed, cattail, fescue, sedge, and other grasses which may grow in natural conditions, and also improve conditions for the cultivation of other plants, including trees. The yield of wetland grass in Belarus varies from 8.1 to 14 DM g ha-1 per year. The yield of willow wood can reach 8-10 of DM g ha-1 per year. The highest prime cost of biomass is obtained for willow wood, but it will be lower with the enlargement of the plantation area. Pellets with a high content of wood residues (sawdust) have the best technological parameters including calorific value when compared to pellets from only peat and peat plus straw. Biomass production on degraded peaty soils has also an ecological effect. The cost of carbon quotas on the market varies from 20 to 25 euro per ton, and biomass production can provide additional profit in the case of CO2 emissions trading depending on the biomass content in the fuel.

Optimal Pricing Decisions for a Low-Carbon Supply Chain Considering Fairness Concern under Carbon Quota Policy.

This research investigates the effect of fairness concerns on a sustainable low-carbon supply chain (LCSC) with a carbon quota policy, in which a manufacturer is in charge of manufacturing low-carbon products and sells them to a retailer. The demand is affected by price and the carbon emission reduction rate. The optimal decisions of pricing and carbon emission reduction rate are analyzed under four decision models: (i) centralized decision, (ii) decentralized decision without fairness concern, (iii) decentralized decision with manufacturer’s fairness concern, (iv) decentralized decision with retailer’s fairness concern. The results indicate that the profits in the centralized LCSC are higher than those in the decentralized LCSC with fairness concern. If a manufacturer pays close attention to fairness, the fairness concern coefficient will reduce the carbon emission reduction rate and the profit of the LCSC and increase the wholesale price and the retail price of the product. If a retailer pays close attention to fairness, and the preference of consumers for a low-carbon product is low, the fairness concern coefficient of the retailer increases the total profit of the LCSC and decreases the carbon emission reduction rate and retail price of the product. Otherwise, if the preference of consumers for a low-carbon product is great, the fairness concern coefficient of the retailer would lead to a lower retail price compared with the retail price in the centralized decision and decrease the total profit of the LCSC.

Economic Evaluation of CCUS Retrofitting of Coal-fired Power Plants Based on Net Cash Flow

Carbon Capture, Utilization and Storage (CCUS) is one of the key technologies for realizing large-scale low-carbon utilization of coal-fired power plants in service. How to evaluate its economics is crucial to the decision-making of traditional coal-fired power enterprises. This paper analyzes the changes in the physical, emission and economic parameters of in-service coal-fired power plants without and with the CCUS retrofit. A method for evaluating the economic feasibility of coal-fired power plants retrofitting based on net cash flow is proposed, which compares the impact of CCUS retrofit on the net present value of the remaining life cycle of the power plant. The impact of uncertain parameters such as carbon dioxide sales unit price, carbon capture device operating cost, free carbon quota, and carbon emission right price on the evaluation results are analyzed.

The Approach to Carbon Emission Quotas of Road Transportation: A Carbon Emission Intensity Perspective

Carbon trading is an effective measure for the road transportation to reduce energy consumption and carbon emissions. Carbon emission quotas are the primary concern to ensuring the efficiency of carbon trading. However, the existing studies have mostly focused on carbon emission quotas in different regions, i.e., countries and provinces. Few literature studies simulate carbon quota allocation in the road transportation. A novel approach from the perspective of carbon emission intensity of vehicle is proposed, on the basis of data envelopment analysis (DEA) model. Unlike other studies, the idea of allocation of baseline excitation is introduced and the intensity is included in the model as the baseline. Firstly, the Delphi method is employed to select input and output indicators. Secondly, carbon emission intensity is determined by the cumulative distribution function (CDF). Furthermore, the carbon emission quotas in road transportation in 30 provinces of China are used to validate the model. The results show that (1) the carbon emission intensity of commercial trucks and buses in China’s road transport industry is 75.04 g/t·km and 13.12 g/p·km, respectively; (2) the provinces of Shanghai, Guangdong, and Xinjiang have the greatest carbon reduction potential and Henan, Hunan, and Anhui have the largest increase in emission quotas; (3) compared with traditional “history responsibility” and “baseline” methods, the proposed approach increases allocation efficiency by 19% and 14%, respectively; and (4) the approach can make the carbon emission quotas play the role of incentive while taking fairness into account and can more effectively promote the implementation of carbon trading system in road transportation.

Reduced growth with increased quotas of particulate organic and inorganic carbon in the coccolithophore <i>Emiliania huxleyi</i> under future ocean climate change conditions

Abstract. Effects of ocean acidification and warming on marine primary producers can be modulated by other environmental factors, such as levels of nutrients and light. Here, we investigated the interactive effects of five oceanic environmental drivers (CO2, temperature, light, dissolved inorganic nitrogen and phosphate) on the growth rate, particulate organic carbon (POC) and particulate inorganic carbon (PIC) quotas of the cosmopolitan coccolithophore Emiliania huxleyi. The population growth rate increased with increasing temperature (16 to 20 ∘C) and light intensities (60 to 240 µmolphotonsm-2s-1) but decreased with elevated pCO2 concentrations (370 to 960 µatm) and reduced availability of nitrate (24.3 to 7.8 µmol L−1) and phosphate (1.5 to 0.5 µmol L−1). POC quotas were predominantly enhanced by the combined effects of increased pCO2 and decreased availability of phosphate. PIC quotas increased with decreased availability of nitrate and phosphate. Our results show that concurrent changes in nutrient concentrations and pCO2 levels predominantly affected the growth, photosynthetic carbon fixation and calcification of E. huxleyi and imply that plastic responses to progressive ocean acidification, warming, and decreasing availability of nitrate and phosphate reduce the population growth rate while increasing cellular quotas of particulate organic and inorganic carbon of E. huxleyi, ultimately affecting coccolithophore-related ecological and biogeochemical processes.

Electricity supply chain coordination with carbon abatement technology investment under the benchmarking mechanism

<p style='text-indent:20px;'>The introduction of the benchmarking mechanism into the electricity industry has influenced whether utility firms choose to invest in carbon abatement technology. This study presents an electricity supply chain that includes a utility firm as the leader and a retailer as the follower to decide on the electricity price and carbon abatement technology investment. The study discusses the impact of the benchmarking mechanism on the decision-making of the electricity supply chain enterprises. The main conclusions are as follows: (1) Investing in carbon abatement technology increased electricity demand, customer surplus, and profits of the electricity supply chain enterprises. (2) Carbon abatement technology investment and profits of the supply chain enterprises increased with the unit carbon quota. (3) A revenue-sharing and cost-sharing contract could be used to coordinate the electricity supply chain.</p>

Measuring the effectiveness of the Chinese Certified Emission Reduction scheme in mitigating CO2 emissions: A system dynamics approach

As an emerging carbon offset mechanism, the Chinese Certified Emission Reduction (CCER) scheme can theoretically supplement the emissions trading scheme (ETS) to alleviate global warming. However, due to poor data availability and short implementation time, little effort has been made to understand the mechanism and driving factors of the CCER scheme. To fill these gaps, this paper establishes a system dynamics model with feedbacks to analyze the coupling effects of the ETS and the CCER scheme. Three scenarios, including a baseline scenario (BAU scenario), a single trading market scenario (i.e., ETS market only), and a double trading market scenario (i.e., both the ETS market and the CCER market), are considered. The simulation results reveal that compared with the BAU scenario, both the single trading market scenario and the double trading market scenario can accelerate the mitigation of CO2 emissions, reduce abatement costs, and transform the energy structure. Interestingly, in the double trading market scenario, although CO2 emissions are slightly higher and the renewable energy proportion is slightly lower than that in the single trading market scenario, the additional cost-saving effect of the double trading market scenario over time increases significantly. Besides, to fulfill the Intended National Determined Contributions (INDCs) as closely as possible, governments need to set a rational offset rate of CCER quotas and to stabilize the carbon quota trading price. These findings enrich the relevant knowledge in the field of climate change by providing implications for the design of novel carbon offset instruments.

Research on China’s Regional Carbon Emission Quota Allocation in 2030 under the Constraint of Carbon Intensity

To achieve the goal of carbon dioxide emission reduction in 2030 promised to the United Nations, China unified the Carbon Trading System (CTS) in 2017 since carbon dioxide quota allocation is one of the core issues of carbon trading. It is imperative to establish a flexible carbon quota allocation system based on the unbalanced characteristics of resource endowment and economic development in different regions. Unlike previous distribution research, this paper considers five principles, which are fairness principle, efficiency principle, feasibility principle, development principle, and innovation principle. The maximum deviation method is used to research the carbon emission quota allocation in 30 provinces of China, and the results are compared with those under the single principle and the information entropy method. The results reveal that the distribution under the single principle is severely unbalanced, making the region have a strong sense of relative deprivation. The maximum deviation method is better than the information entropy method to achieve carbon intensity by 2030. It is also conducive to promote the coordinated development of the regional economy, narrow the poverty gap, and achieve sustainable development.

Comparative Proteomic Analysis Reveals New Insights Into the Common and Specific Metabolic Regulation of the Diatom Skeletonema dohrnii to the Silicate and Temperature Availability.

Silicate (Si) and temperature are essential drivers for diatom growth and development in the ocean. Response of diatoms to these particular stress has been investigated; however, their common and specific responses to regulate intracellular development and growth are not known. Here, we investigated the combination of physiological characteristics and comparative proteomics of the diatom Skeletonema dohrnii grown in silicate- and temperature-limited conditions. Results show that cell carbon and lipid quotas were higher at lower-temperature cells, whereas cellular phosphate was higher in cells grown with lower Si. In silicate-limited cells, nitrate transporters were downregulated and resulted in lower nitrate assimilation, whereas the phosphate transporters and its assimilation were reduced in lower-temperature conditions. In photosynthesis, lower silicate caused impact in the linear electron flow and NADPH production, whereas cycling electron transport and ATP production were affected by the lower temperature. Concerning cell cycle, imbalances in the translation process were observed in lower-silicate cells, whereas impact in the transcription mechanism was observed in lower-temperature cells. However, proteins associated with carbon fixation and photorespiration were downregulated in both stress conditions, while the carbohydrate and lipid synthesis proteins were upregulated. Our results showed new insights into the common and specific responses on the proteome and physiology of S. dohrnii to silicate and temperature limitation, providing particular nutrient (Si)- and temperature-dependent mechanisms in diatoms.

Infrastructure development compromises creation of low-carbon cities

Of the UN SDGs, the role of infrastructure in enabling or compromising the development of future low-carbon settlements falls under the goal #11 “Sustainable cities and communities”. However, when it comes to the specific content of the SDG #11, only the subgoals 11.6 and 11.B-C loosely include these development-phase emissions. If it was shown that infrastructure development compromises creation of low-carbon cities, it would also mean that the SDG #11 might fail to guide the development to sustainable cities and communities. In this study the role of infrastructure and capital development emissions are analyzed from different perspectives by synthesizing the suggested emissions levels from previous studies. Iceland is looked at separately as a case country and the capital Reykjavik as a case city. Previous studies on Iceland are utilized to discuss the infrastructure and capital development related emissions and to compare them to the overall carbon footprints suggested for these locations and their residents. The results suggest that climate-sustainable built environment cannot be built with the currently dominant materials of concrete, steel and asphalt. The issue should quickly receive more attention before we run out of the remaining carbon quota.

Carbon regulations, production capacity, and low-carbon technology level for new products with incomplete demand information

This study investigates the effects of two carbon regulations on manufacturers’ production capacity and low-carbon technology level for new products with incomplete demand information. As objective functions are not concave, we use the recursive method to solve the optimization problems with/without constraints. The optimal decision rules for production capacity and low-carbon technology level are derived. The theoretical results show that carbon regulations can encourage manufacturers to improve low-carbon technology level, but they limit the manufacturers’ production capacity. The benefits of carbon quotas and subsidies should be considered in conjunction with manufacturers’ planned capacity, as inappropriate trade or subsidy incentives may discourage firms from low-carbon innovation. The carbon cap-and-subsidy regulation increases the decision complexity. In contrast, under the carbon cap-and-trade regulation, policymakers can consider fewer elements. Numerical results show, when the carbon trading price is low, the carbon emissions under the carbon cap-and-subsidy regulation is reduced, but there may be a high subsidy cost for policymakers. However, when the carbon trading price is above a certain threshold, the carbon cap-and-trade regulation is more beneficial for policymakers. Moreover, under the carbon cap-and-trade regulation, manufacturers’ decisions and social welfare are less affected by fluctuations in market demand.

Analytics of cap-and-trade policy for dual supply chain network structures

Nowadays, managing clean and green supply chain activities by reducing carbon footprint is a prominent aspect of the research. This study presents a dual supply chain (DSC) model under the cap-and-trade (CAT) emission reduction for the manufacturer-led five different DSC network structures, namely vertically integrated, decentralized, partially integrated retail, partially integrated direct, and horizontally integrated to minimize the carbon footprint. It uses a backward induction method to find optimum decision variables namely wholesale price, selling price, demand, and emission reduction rate. It presents a mathematical analysis to evaluate how the permitted emission quota and emission level of channel members affect the decision variables of various network structures. Further, it conducts a sensitivity analysis to measure how consumers’ channel preferences affect price and emission reduction rates. This study illustrates that (1) the emission reduction investment can increase demand and improve the emission reduction rate with a considerable drop in price. Also, (2) the additional purchased carbon quota can help maintain emission levels up to a certain extent only because any additional buying will be considered a short-term salutation. As a result, channel members are encouraged to invest in emission reduction technology instead of buying additional permits. These results conclude that promoting CAT can help achieve targets to reduce emissions and foster economic and social development.