Publication: Pricing carbon emissions in China
Loading...
Files
Official URL
Full text at PDC
Publication Date
2018
Advisors (or tutors)
Editors
Journal Title
Journal ISSN
Volume Title
Publisher
Facultad de Ciencias Económicas y Empresariales. Instituto Complutense de Análisis Económico (ICAE)
Citations
Exportar
Abstract
The purpose of the paper is to provide a clear mechanism for determining carbon emissions pricing in China as a guide to how carbon emissions might be mitigated to reduce fossil fuel pollution. The Chinese Government has promoted the development of clean energy, including hydroelectric power, wind power, and solar energy generation. In order to involve companies in carbon emissions control, a series of regional and provincial carbon markets have been established since 2013. Since China’s carbon market was established in 2013 and mainly run domestically, and not necessarily using market principles, there has been almost no research on China’s carbon price and volatility. This paper provides an introduction to China’s regional and provincial carbon markets, proposes how to establish a national market for pricing carbon emissions, discusses how and when these markets might be established, how they might perform, and the subsequent prices for China’s regional and national carbon markets. Power generation in manufacturing consumes more than other industries, with more than 40% of total coal consumption. Apart from manufacturing, the northern China heating system also relies on fossil fuels, mainly coal, which causes serious pollution. In order to understand the regional markets well, it is necessary to analyze the energy structure in these regions. Coal is the primary energy source in China, so that provinces that rely heavily on coal receive a greater number of carbon emissions permits from the Chinese Government. In order to establish a national carbon market for China, a detailed analysis of eight important regional markets will be presented. The four largest energy markets, namely Guangdong, Shanghai, Shenzhen and Hubei, traded around 82% of the total volume and 85% of the total value of the seven markets in 2017, as the industry structure of the western area is different from that of the eastern area. The China National Development and Reform Commission has proposed a national carbon market, which can attract investors and companies to participate in carbon emissions trading. This importantissue will be investigated in the paper.
Description
UCM subjects
Unesco subjects
Keywords
Citation
Chang, C.-C. (2010), “A Multivariate Causality Test of Carbon Dioxide Emissions, Energy Consumption and Economic Growth in China”, Applied Energy, 87, 3533–3537.
Chang, C.-L., M. McAleer and G.D. Zuo (2017), “Volatility Spillovers and Causality of Carbon Emissions, Oil and Coal Spot and Futures for the EU and USA”, Sustainability, 9(10:1789), 1-21.
Chen, W. (2005), “The Costs of Mitigating Carbon Emissions in China: Findings from China MARKAL-MACRO Modeling”, Energy Policy, 33(7), 885-896.
Daskalakis, G. and R. Markellos (2009), “Are Electricity Risk Premia Affected by Emission Allowance Prices? Evidence from the EEX, Nord Pool and Powernext”, Energy Policy, 37(7), 2594-2604.
Daskalakis G., D. Psychoyios, and R.N. Markellos (2009), “Modeling CO2 Emission Allowance Prices and Derivatives: Evidence from the European Trading Scheme”, Journal of Banking & Finance, 33, 1230–1241.
Gregg, J.S., R.J. Andres, and G. Marland (2008), “China: Emissions Pattern of the World Leader in CO2 Emissions from Fossil Fuel Consumption and Cement Production”, Geophysical Research Letters, 35, L08806, 1-5.
Li, J. and M. Colombier (2009), “Managing Carbon Emissions in China Through Building Energy Efficiency”, Journal of Environmental Management, 90(8), 2436-2447.
Liu, L., C. Chen, Y. Zhao, and E. Zhao (2015), “China’s Carbon-emissions Trading: Overview, Challenges and Future”, Renewable and Sustainable Energy Reviews, 49, 254-266.
Nam, K.-M., C.J. Waugh, S. Paltsev, J.M. Reilly, and V.J. Karplus (2014), “Synergy Between Pollution and Carbon Emissions Control: Comparing China and the United States”, Energy Economics, 46, 186-201.
Tang, L., J. Wu, L. Yu, and Q. Bao (2015), “Carbon Emissions Trading Scheme Exploration in China: A Multi-agent-based Model”, Energy Policy, 81, 152–169.
Xiong, L., B. Shen, S. Qi, L. Price, and B. Ye (2017), “The Allowance Mechanism of China’s Carbon Trading Pilots: A Comparative Analysis with Schemes in EU and California”, Applied Energy, 185, 1849–1859.
Zhang, Y. (2015), “Reformulating the Low-Carbon Green Growth Strategy in China”, Climate Policy, 15, 40–59.
Zhang D., V. Karplus, C. Cassisa, and X. Zhang (2014), “Emissions Trading in China: Progress and Prospects”, Energy Policy, 75, 9–16.
Zhang Y.J. and Y.F. Sun (2016), “The Dynamic Volatility Spillover between European Carbon Trading Market and Fossil Energy Market”, Journal of Cleaner Production, 112(4), 2654–2663.
Zhang, Y.-J., A.D. Wang, and Y.-B. Da (2014), “Regional Allocation of Carbon Emission Quotas in China: Evidence from the Shapley Value Method”, Energy Policy, 74, 454-464.