Potential impact of (CET) carbon emissions trading on China’s power sector: A perspective from different allowance allocation options
(2010) In Energy 35(8). p.3921-3931- Abstract
- Abstract in Undetermined
In Copenhagen climate conference China government promised that China would cut down carbon intensity 40–45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China’s power sector and discusses the impact of different allocation options of allowances. Agent-based modeling is one appealing new methodology that has the potential to overcome some shortcomings of traditional methods. We establish an agent-based model, CETICEM (CET Introduced China Electricity Market), of introduction of... (More) - Abstract in Undetermined
In Copenhagen climate conference China government promised that China would cut down carbon intensity 40–45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China’s power sector and discusses the impact of different allocation options of allowances. Agent-based modeling is one appealing new methodology that has the potential to overcome some shortcomings of traditional methods. We establish an agent-based model, CETICEM (CET Introduced China Electricity Market), of introduction of CET to China. In CETICEM, six types of agents and two markets are modeled. We find that: (1) CET internalizes environment cost; increases the average electricity price by 12%; and transfers carbon price volatility to the electricity market, increasing electricity price volatility by 4%. (2) CET influences the relative cost of different power generation technologies through the carbon price, significantly increasing the proportion of environmentally friendly technologies; expensive solar power generation in particular develops significantly, with final proportion increasing by 14%. (3) Emission-based allocation brings about both higher electricity and carbon prices than by output-based allocation which encourages producers to be environmentally friendly. Therefore, output-based allocation would be more conducive to reducing emissions in the Chinese power sector. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/2439736
- author
- Cong, Ronggang LU and Wei, Yi-Ming
- publishing date
- 2010
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Carbon emissions trading, Emission-based allocation, Output-based allocation, Agent-based model
- in
- Energy
- volume
- 35
- issue
- 8
- pages
- 3921 - 3931
- publisher
- Elsevier
- external identifiers
-
- scopus:77955277289
- ISSN
- 1873-6785
- DOI
- 10.1016/j.energy.2010.06.013
- language
- English
- LU publication?
- no
- id
- 1f4b068f-2ead-4664-b95c-588301304d4e (old id 2439736)
- date added to LUP
- 2016-04-01 10:11:11
- date last changed
- 2022-04-19 23:35:20
@article{1f4b068f-2ead-4664-b95c-588301304d4e,
abstract = {{Abstract in Undetermined<br/>In Copenhagen climate conference China government promised that China would cut down carbon intensity 40–45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China’s power sector and discusses the impact of different allocation options of allowances. Agent-based modeling is one appealing new methodology that has the potential to overcome some shortcomings of traditional methods. We establish an agent-based model, CETICEM (CET Introduced China Electricity Market), of introduction of CET to China. In CETICEM, six types of agents and two markets are modeled. We find that: (1) CET internalizes environment cost; increases the average electricity price by 12%; and transfers carbon price volatility to the electricity market, increasing electricity price volatility by 4%. (2) CET influences the relative cost of different power generation technologies through the carbon price, significantly increasing the proportion of environmentally friendly technologies; expensive solar power generation in particular develops significantly, with final proportion increasing by 14%. (3) Emission-based allocation brings about both higher electricity and carbon prices than by output-based allocation which encourages producers to be environmentally friendly. Therefore, output-based allocation would be more conducive to reducing emissions in the Chinese power sector.}},
author = {{Cong, Ronggang and Wei, Yi-Ming}},
issn = {{1873-6785}},
keywords = {{Carbon emissions trading; Emission-based allocation; Output-based allocation; Agent-based model}},
language = {{eng}},
number = {{8}},
pages = {{3921--3931}},
publisher = {{Elsevier}},
series = {{Energy}},
title = {{Potential impact of (CET) carbon emissions trading on China’s power sector: A perspective from different allowance allocation options}},
url = {{http://dx.doi.org/10.1016/j.energy.2010.06.013}},
doi = {{10.1016/j.energy.2010.06.013}},
volume = {{35}},
year = {{2010}},
}