Emission Quotas Research Articles

Allocating quotas for industrial carbon emissions fairly and efficiently to achieve “peak carbon”: A case of the yellow river basin in China

The “peak carbon” target has triggered wide-ranging and profound systemic changes and transformations that have left the provinces along the basin facing the dual dilemma of implementing carbon reduction actions and socioeconomic development. The allocation of carbon emission quotas is a fundamental task that reflects the division of labour and collaboration within a river basin to achieve the “peak carbon” target. Therefore, the fair and efficient allocation of industrial carbon emission quotas is the key to the implementation of carbon emissions trading and the establishment of carbon offset mechanisms. In the study, based on the description of the spatial and temporal evolution of the industrial carbon footprint and its carrying capacity, the industrial carbon offset area and industrial carbon reimbursement area are divided. Moreover, the allocation method of industrial carbon emission quotas is proposed by accounting for the principles of fairness, efficiency, and sustainability, and is verified using the provinces along the Yellow River Basin in China as a case. The results show that the industrial carbon carrying capacity is “unbalanced”. The provinces with strong carrying capacity are in the middle and upper reaches, and provinces with weak carrying capacity are in the middle and lower reaches. Moreover, the industrial carbon offset in the basin as a whole is higher than the industrial carbon compensation, which is potentially conducive to the implementation of cross-basin carbon offset. The weights of the equity, efficiency and sustainability indicators are 0.46, 0.23 and 0.31, respectively. The two industrial carbon compensated provinces can transfer the surplus industrial carbon emission quotas to the two industrial carbon offset provinces after obtaining the corresponding financial compensation. The Gini coefficient is 0.26, which is relatively fair. The study not only reveals the mechanism of the relationship among industrial carbon carrying capacity, carbon emission quota and carbon offset, but also provides a scientific basis for the establishment of a carbon emission quota trading market and the strengthening of the inter-provincial coordinated emission reduction incentives in the basin.

Allocating inter-provincial CEA in China based on the utility perspective --a method for improving the variable weight function

Introduction:At different times, China has pursued different carbon emission reduction targets, so it is crucial to develop a reasonable and flexible allocation scheme for Chinese carbon emissions quotas, referred to as Chinese Emission Allowance (CEA), in order to achieve carbon reduction goals. As important responsible entities for carbon reduction, each province needs to rely on a well-designed CEA allocation scheme to help achieve their emission reduction goals.Methods:Therefore, based on the utility perspective, this paper constructs allocation principles and methods to formulate the inter-provincial CEA allocation scheme for China in 2030. Specifically, the entropy method, SBM model, improved variable weight function, and ARIMA time series model are sequentially adopted to simulate the re-allocation scheme, examine its rationality, and develop CEA allocation schemes under different principles.Results and Discussion:The following conclusions are drawn: 1) The allocation scheme formulated based on historical emission simulation methods, industry benchmark methods, and other current CEA allocation methods has certain irrationality, and future CEA allocation should not follow the original methods; 2) The improved variable weight function is better suited for allocation in CEA than the current original allocation method. The allocation scheme developed under this method, which balances fairness and efficiency principles, is more appropriate for the actual reduction of carbon emissions in China.

EXPERIENCE WITH GREENHOUSE GAS EMISSION ALLOWANCE ALLOCATION AND ANALYSIS OF LESSONS FOR VIET NAM

This study analyzes and synthesizes international experiences in allocating greenhouse gas emission quotas, drawing lessons for Viet Nam's developing carbon market. The research examines emission trading systems (ETS) and quota allocation methods from various countries and regions, including the European Union, Germany, Austria, the United Kingdom, Switzerland, the United States, Canada, Nigeria, Kenya, South Africa, China, Japan, and New Zealand. Key findings highlight the importance of diversifying allocation methods, combining free allocation, auctioning, and benchmarking approaches. The study emphasizes the need for flexibility in system design, adapting to specific economic and social conditions of each country. Lessons learned include prioritizing high-emission reduction potential sectors, setting reasonable emission caps based on actual data, ensuring transparency in information disclosure, and establishing effective monitoring and evaluation mechanisms. The research also stresses the importance of providing technical support to businesses, especially small and medium enterprises, in complying with ETS regulations. Additionally, the study addresses concerns such as preventing carbon leakage, assessing social impacts, and ensuring international compatibility of the system. These insights provide a valuable foundation for Viet Nam to develop an effective greenhouse gas ETS that aligns with national conditions and sustainable development goals.

Globalisation and Regulatory Strategies: Adapting to Changes in International Business

This article examines the interrelations between globalisation, economic development, and ecological sustainability. It analyses the role of financial innovations in promoting sustainable development and focuses on strategies that help companies adapt and thrive in the face of globalisation, turning challenges into opportunities. Given the complexity of the global business environment, success on the international level depends not only on the speed of changes but also on compliance with various regulatory standards. Regulatory strategies are crucial for mitigating risks and leveraging new opportunities. Therefore, companies must have a thorough understanding of their internal processes and the external regulatory and political environment. The research suggests that the integration of advanced financial instruments and effective political strategies can optimise the impact of globalisation, fostering economic growth and ecological sustainability. It is important to maintain a balanced and objective tone when presenting research findings. The importance of further analysing mechanisms for regulating globalisation processes and developing innovative financial instruments to stimulate environmentally sustainable investments is underscored, emphasising the need for international cooperation and adaptation to climate change. The study concludes that achieving harmony between economic progress and environmental protection requires economic measures, such as carbon taxes and emission quota systems, that embody the principle of pollution responsibility. Legislative initiatives that set limits on emissions and regulate resource use, as well as voluntary initiatives such as corporate social responsibility programs and eco-production criteria, are also necessary. The range of approaches reflects different methods of implementation, levels of compulsion, and stakeholder involvement. The implementation of a particular strategy depends on the economic context, political climate, level of public awareness, and technical readiness of a given country or region.

Credible calculation method for regional corrected carbon emission factors taking into account the nearby consumption of renewable energy

Abstract The carbon emission factor of the power grid is a key data indicator for measuring the carbon emission level on the user side. Currently, the carbon emission factor of the power grid is not sufficient to accurately express the regional carbon emission level, and especially cannot accurately reflect the regional new energy consumption level, which affects user confidence in emission reduction and the accuracy of carbon emission quota issuance. Therefore, this article utilizes blockchain technology and carbon emission flow theory to realize the impact of user-side self-generated and self-used photovoltaics (PV) on carbon emission factors. We have constructed a residual power grid correction model, designed a blockchain intelligent terminal module and functional requirements, ensured the correctness of the model and results from the source, solved the problem of data tampering and insufficient data credibility generated by terminal devices at the source, and ultimately helped achieve the dual carbon goal.

Time varying characteristics of factors affecting carbon price in emission trading scheme in China: Evidence from SV-TVP-VAR approach

Analysis of the factors influencing the price of carbon emissions trading in China and its time-varying characteristics is essential for the smooth operation of the carbon trading system. We analyse the time-varying effects of public concern, degree of carbon regulation, crude oil price, international carbon price and interest rate level on China’s carbon price through SV-TVP-VAR model. Among them, the quantification of public concern and the degree of carbon emission regulation is based on microblog text and government decisions. The results show that all the factors influencing carbon price are significantly time-varying, with the shocks of each factor on carbon price rising before 2019 and turning significantly thereafter. The short-term shock effect of each factor is more significant compared to the medium- and long-term, and the effect almost disappears at a lag of six months. Thanks to public environmental awareness, low-carbon awareness and the progress of carbon market management mechanisms, public concern has had the most significant impact on carbon price since 2019. With the promulgation of relevant management measures for the carbon market, relevant regulations on carbon emission accounting, financing constraints, and carbon emission quota allocation for emission-controlled enterprises have become increasingly mature, and carbon price signals are more sensitive to market information. The above findings provide substantial empirical evidence for all stakeholders in the market, who need to recognize that the impact of non-structural factors on the price of carbon varies over time. Government intervention also serves as a key aspect of carbon emission control and requires the introduction of relevant constraints and incentives. In particular, emission-controlling firms need to focus on the policy direction of the carbon market, and focus on the impact of Internet public opinion on business production while reducing carbon allowance demand and energy dependence.

Cold chain distribution network design with heterogeneous fleet under carbon reduction policy application effect

ABSTRACT To integrate cold chain distribution network design problem with heterogeneous fleet, a multi-objective optimisation model is proposed to simultaneously optimise distribution routes, the quantity of internal combustion and electric refrigerated trucks (ERTs), and the number and location of distribution centres and charging stations with time window constraints, where the cold chain distribution operating cost and the customer dissatisfaction cost are minimised. A hybrid solution methodology, combining a multi-objective artificial fish swarm algorithm with a label-based optimisation algorithm, is presented to address this model. Extensive computational experiments verify the effectiveness of the proposed method. Moreover, a sensitivity analysis, focusing on the range of ERTs, the purchase subsidy for ERTs, the carbon tax and the carbon emission quota, informs the development of diverse carbon reduction policies. A comparative analysis of the implementation effect of carbon reduction policies can provide optimisation decision support for promoting sustainability in the electrification of cold chain distribution.

Allocation of CO2 emission quotas for industrial production in Industry 4.0: Efficiency and equity

The method of carbon emission quota (CEQ) allocation based on data envelopment analysis (DEA) can allocate quotas without impacting efficiency improvements in industrial sector. A key element in effectively reducing carbon emissions is ensuring accurate efficiency measurement and equitable allocation of CEQ in the Industry 4.0 era. This paper divides industrial system into two stages: production (which more accurately reflects carbon emissions in production) and trading (which involves in the commercial system). Carbon emission efficiency in the production stage is calculated with a DEA model, with a high degree of accuracy. Given that higher efficiency values correspond with stronger capacity to bear the costs of carbon reduction, a CEQ allocation model is proposed which considers the contribution degree of efficiency. This model is applied to China’s industrial production system. The results show that a CEQ allocation scheme that focuses only on the production stage is more equitable than schemes which treat the industrial system as a black box. In allocation schemes which focus only on the production stage, the central region of China is least able to bear the cost of carbon reduction and receives the most CEQ, and the opposite is true in the eastern region of China. The proposed method not only measures the carbon emission efficiency of industrial production more accurately, but also considers the balanced development of different regions when allocating carbon emission rights. The CEQ allocation scheme based on our model can confidently meet the needs of sustainable development in the era of Industry 4.0.

Accounting for income and expenditure on government quotas for greenhouse gas emissions in crop production

Subject. This article discusses the problems and possibilities of accounting for income and expenses associated with compliance with quotas for greenhouse emissions in relation to the activities of crop production enterprises. Objectives. The article aims to systematize and generalize knowledge about the problems and possibilities of accounting for income and expenses associated with compliance with quotas for greenhouse emissions at various enterprises, including those engaged in crop production. Methods. For the study, I used a dialectical approach, observation, analysis and synthesis, as well as elements of accounting methods. Results. The article proposes to take into account the income and expenses associated with compliance with emission quotas as part of ordinary activities, and it recommends calculating the cost of individual plant varieties taking into account the costs associated with quotas. It proposes an accounting system for recording a long-term government greenhouse emissions quota as a government subsidy (measured at fair value) in the ordinary course of business. Conclusions. Greenhouse emissions are inseparable from the standard activities of enterprises and are calculated on the basis of their volumes. The volume of greenhouse emissions should be reflected in the cost and profitability of sales of plant crops.

The Establishment of China's Carbon Emission Quota Futures Market

The Establishment of China's Carbon Emission Quota Futures Market

Углеродные единицы: зарубежное регулирование. Часть вторая

The work is devoted to identifying the legal nature of carbon units, as well as substantiating the possibility of classifying carbon units as objects of law in order to determine the optimal model for regulating emission and turnover of carbon units and emission quotas.

Forecasting changes in the balance of the country's energy supply system under the introduction of a Carbon Border Adjustment Mechanism

Subject. The article investigates the Carbon Border Adjustment Mechanism (CBAM) and implications of its implementation for the energy systems of countries with high carbon footprint. Objectives. The aim is to create a forecast of changes in the balance of the country's energy supply system, considering the gradual introduction of the CBAM with a decrease in the number of free permits for non-payment of declared emissions, and an increase in the coverage of emissions. Methods. The study employs methods of statistical analysis. Results. The study established that the introduction of the CBAM creates economic threats for exporting countries with a high carbon footprint. A national emissions trading system is a means of combating it. The paper shows that with the forecast price of carbon permits obtained on the basis of time series extrapolation, the introduction of a system of emission quotas will reduce losses in GDP and the total energy capacity of the country's energy system. Conclusions. The establishment of the system of emission quotas is a complex and lengthy process that requires the development and testing of economic and financial mechanisms.

Cooperation of firms’ environmental innovation in a supply chain under government regulation

As climate pollution becomes more severe, there is a growing interest in reducing emissions across all industries. Motivated by the emerging popularity of inter-firm cooperation to reduce carbon emissions in the supply chain, this paper investigates the effect of the firms’ environmental innovation cooperation under government regulation. Specifically, we consider a supply chain with a manufacturer selling products through a retailer, where both firms have asymmetrical environmental innovation efficiencies. Based on whether to cooperate in environmental innovation, the manufacturer and retailer invest in environmental innovation separately or simultaneously. The findings suggest that corporate collaboration, especially environmental innovation cartels, can promote environmental innovation, reducing product emission intensity, further driving down wholesale price, and increasing sales volume. Notably, the more closely firms cooperate, the more beneficial it is for the entire supply chain and consumers, but not necessarily for the manufacturer and retailer simultaneously. In the case of environmental innovation cartels, a two-part tariff contract can coordinate the supply chain, increasing the manufacturer’s and retailer’s profits. Furthermore, cooperation is detrimental to the environment when the carbon tax rate is relatively high. The government should set the intensity of regulation reasonably, considering the environmental innovation mode of firms. As the emission quota grows, carbon tax regulation is more likely to result in fewer emissions and is favored by policymakers. We also extend the model to multiple situations to check the robustness of the results and find our main results remain valid.

Carbon Emission Right Price Prediction based on IOWHA Operator Vector Angle Cosine Combination Deep Learning

The relentless exacerbation of the greenhouse effect poses a significant challenge to the progress and sustainability of human civilization. Carbon emission rights serve as a pivotal gauge of the carbon trading market's dynamics. Examining the impact of carbon emission rights prices can shed light on how governments indirectly influence these prices through mechanisms such as carbon emission quotas and permits. This study focuses on analyzing the transaction prices of carbon emission rights quotas within the Guangzhou carbon trading market spanning from January 2015 to March 2023. Leveraging a selection of 17 variables across the realms of energy prices, macroeconomics, financial markets, and ecological environment, and drawing insights from the predictive outcomes of three distinct sub-models—namely Ridge Regression, Random Forest Regression, and Long Short-Term Memory neural network (LSTM)—a novel IOWHA operator vector angle cosine combination model is devised. The findings underscore that this combined model harnesses the predictive strengths of each sub-model, effectively curbing prediction discrepancies, and enhancing overall accuracy. The integration of these methodologies represents an optimal fusion for predictive modeling.

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.

Legal and regulatory framework of environmental initiatives in the Czech Republic as a potential model for green policy implementation in Eastern Europe

EU countries, in particular the Czech Republic, are developing structural mechanisms to influence the development of their economic model in the environmental sphere. The study of the Czech Republic’s experience in implementing environmental reforms is relevant for understanding their impact on the country’s economic sustainability and fulfilment of international obligations. The purpose of the study was to analyse the regulatory framework and results of the reforms implemented in the environmental policy of the Czech Republic and their impact on the country’s further development. The results were obtained using special legal methods, such as terminological, formal legal and special legal methods. Identification of the main environmental problems, reformed economic sectors and the intensity of human activity’s impact on nature, determination of stakeholders in the changes and identification of the problems solved allowed us to conclude that the measures taken were rational and varied in their effectiveness. The analysis of the environmental and regulatory framework of environmental policy in the Czech Republic and the adopted environmental legislation, such as CO2 emission quotas, rational use of natural raw materials, waste management, green taxes, benefits and subsidies for the functioning of markets for environmental goods and services, showed the undeniable advantages of an environmentally oriented economic model over the one focused on profit. The study found that the application of such measures helps to reduce the negative impact on the environment, improve the quality of life of the population and ensure sustainable economic development. Incentives for companies that implement environmentally friendly technologies stimulate innovation and reduce production costs. Legislation plays a significant role in this, in particular, the Law of the Czech Republic No. 165/2012 Sb. The results of the study can be used by researchers from around the world who study the implementation of new methods of environmental policy

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>

Carbon emission allowances and green development efficiency

This study delves into the nexus between the efficiency of carbon emission allocation and the efficiency of green development within the context of innovative city construction. Leveraging data from 283 prefecture-level cities and corresponding provincial-level panel data spanning the period from 2005 to 2019 in mainland China, the research employs the zero-sum gain DEA model to compute provincial carbon emission allocation efficiency and allocate allowances. Furthermore, it utilizes the all-factor non-radial directional distance function and the SBM-DEA model to gauge the green development efficiency of prefecture-level cities. The double-difference method is applied to evaluate the impact of innovative city construction on regional green development efficiency. The results indicate that an imbalance between carbon emission allocation efficiency and emission quotas detrimentally affects urban green development. However, technological progress, factor accumulation, and the institutional environment associated with innovative city building mitigate this negative impact. Heterogeneity analysis reveals a differentiated effect of innovative city building on regional green development efficiency. This paper not only explores the concept of achieving an equitable distribution of carbon emission allowances but also examines how innovative city building influences regional green development. By establishing connections between urban policies, the equitable distribution of carbon emission allowances, and regional green development, it introduces a new perspective for promoting high-quality development at the regional level.

Effectiveness of policies for electric commercial vehicle adoption and emission reduction in the logistics industry

Electric commercial vehicles (ECVs) offer a promising solution to reduce carbon emissions, but barriers like high purchase costs, limited range, long charging times, and battery degradation hinder their adoption. This research develops a mathematical model to explore the impact of government policies, specifically carbon tax policy and the cap-and-trade mechanism, with or without purchase subsidy, on the mixed fleet configuration of electric and internal combustion commercial vehicles. Through a comparative analysis based on a real case in Shenzhen, this research provides insights into the impact of policies on ECV adoption and emission reduction. The findings indicate that higher tax rates and carbon prices effectively promote ECV adoption, while the carbon emission quota does not. When choosing policies, the government should consider its situation and objectives. Combining cap-and-trade mechanisms with purchase subsidies is the most effective for ECV adoption and emission reduction, assuming financially feasible. Alternatively, implementing a carbon tax policy without purchase subsidy is more practical. The cap-and-trade mechanism in the long term supports the phase-out of purchase subsidies and contributes to sustainable economic and environmental development. What's more, the findings provide guides for the government to determine an appropriate industry regulator factor when allocating quotas for the logistics industry.

The research of river basin ecological compensation based on water emissions trading mechanism.

By integrating the successful case of the European Union emissions trading system, this study proposes a water emissions trading system, a novel method of reducing water pollution. Assuming that upstream governments allocate initial quotas to upstream businesses as the compensation standard, this approach defines the foundational principles of market trading mechanisms and establishes a robust watershed ecological compensation model to address challenges in water pollution prevention. To be specific, the government establishes a reasonable initial quota for upstream enterprises, which can be used to limit the emissions of upstream pollution. When enterprises exceed their allocated emissions quota, they face financial penalties. Conversely, these emissions rights can be transformed into profitable assets by participating in the trading market as a form of ecological compensation. Numerical simulations demonstrate that various pollutant emissions from upstream businesses will have various effects on the profits of other businesses. Businesses in the upstream region received reimbursement from the assigned emission rights through the market mechanism, demonstrating that ecological compensation for the watershed can be achieved through the market mechanism. This novel market trading system aims at controlling emissions management from the perspectives of individual enterprises and ultimately optimizing the aquatic environment.