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- Publisher Website: 10.1016/j.spc.2022.05.021
- Scopus: eid_2-s2.0-85131398245
- WOS: WOS:000836555800008
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Article: Does China emission trading scheme reduce marginal abatement cost? A perspective of allowance allocation alternatives
Title | Does China emission trading scheme reduce marginal abatement cost? A perspective of allowance allocation alternatives |
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Authors | |
Keywords | Allowance allocation rule Emissions trading scheme Marginal abatement cost |
Issue Date | 2022 |
Citation | Sustainable Production and Consumption, 2022, v. 32, p. 690-699 How to Cite? |
Abstract | Emission trading schemes (ETSs) are regarded as cost-effective environmental regulatory policies; however, because of the loose carbon allowances, it is up for debate whether China's carbon emission trading scheme (CETS) plays a cost-effective role in carbon emission reduction. This paper investigates how the marginal abatement cost (MAC) is changed by the China CETS from a perspective of alternative allowance allocation methods. The empirical strategy adopts the directional distance function and difference-in-difference (DID) analysis, coupled with the industry-by-province level data from 2008 to 2016. The roles of free-auction combined allowance allocation rules and free allocation in the MAC are explored. Furthermore, the heterogeneous effects of adopted free allocation in CETS, i.e., benchmarking (BENCH), emission-based grandfathering (EGRAND), and intensity-based grandfathering (IGRAND) on MAC of industries are investigated. The empirical findings disclose the following. First, China CETS results in an 8% decline in MAC for the regulated industrial sectors in pilot areas. Second, regulated industrial sectors allocated carbon allowances by free rule decrease their MAC by approximately 1%, while those allocated carbon allowances by free-auction combined rule increase their MAC by 11%. Meanwhile, of the free allocation alternatives, IGRAND causes a 24% increase in the MAC, while EGRAND and BENCH allocation methods lead to insignificant changes in the MAC for the regulated industrial sectors. |
Persistent Identifier | http://hdl.handle.net/10722/333702 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Peng, Hua Rong | - |
dc.contributor.author | Cui, Jingbo | - |
dc.contributor.author | Zhang, Xiaoling | - |
dc.date.accessioned | 2023-10-06T05:21:42Z | - |
dc.date.available | 2023-10-06T05:21:42Z | - |
dc.date.issued | 2022 | - |
dc.identifier.citation | Sustainable Production and Consumption, 2022, v. 32, p. 690-699 | - |
dc.identifier.uri | http://hdl.handle.net/10722/333702 | - |
dc.description.abstract | Emission trading schemes (ETSs) are regarded as cost-effective environmental regulatory policies; however, because of the loose carbon allowances, it is up for debate whether China's carbon emission trading scheme (CETS) plays a cost-effective role in carbon emission reduction. This paper investigates how the marginal abatement cost (MAC) is changed by the China CETS from a perspective of alternative allowance allocation methods. The empirical strategy adopts the directional distance function and difference-in-difference (DID) analysis, coupled with the industry-by-province level data from 2008 to 2016. The roles of free-auction combined allowance allocation rules and free allocation in the MAC are explored. Furthermore, the heterogeneous effects of adopted free allocation in CETS, i.e., benchmarking (BENCH), emission-based grandfathering (EGRAND), and intensity-based grandfathering (IGRAND) on MAC of industries are investigated. The empirical findings disclose the following. First, China CETS results in an 8% decline in MAC for the regulated industrial sectors in pilot areas. Second, regulated industrial sectors allocated carbon allowances by free rule decrease their MAC by approximately 1%, while those allocated carbon allowances by free-auction combined rule increase their MAC by 11%. Meanwhile, of the free allocation alternatives, IGRAND causes a 24% increase in the MAC, while EGRAND and BENCH allocation methods lead to insignificant changes in the MAC for the regulated industrial sectors. | - |
dc.language | eng | - |
dc.relation.ispartof | Sustainable Production and Consumption | - |
dc.subject | Allowance allocation rule | - |
dc.subject | Emissions trading scheme | - |
dc.subject | Marginal abatement cost | - |
dc.title | Does China emission trading scheme reduce marginal abatement cost? A perspective of allowance allocation alternatives | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.spc.2022.05.021 | - |
dc.identifier.scopus | eid_2-s2.0-85131398245 | - |
dc.identifier.volume | 32 | - |
dc.identifier.spage | 690 | - |
dc.identifier.epage | 699 | - |
dc.identifier.eissn | 2352-5509 | - |
dc.identifier.isi | WOS:000836555800008 | - |