Main content area

An integrated approach for allocating carbon emission quotas in China’s emissions trading system

Wu, Jianjun, Guo, Qinghai, Yuan, Jiahai, Lin, Jianyi, Xiao, Lishan, Yang, Dewei
Resources, conservation, and recycling 2019 v.143 pp. 291-298
carbon, carbon dioxide, emissions factor, energy, energy industry, environmental markets, greenhouse gas emissions, planning, China
China has started its design of national emissions trading system (ETS), and power sector is included in its initial stage. In this paper, we propose a systematic framework to estimate total carbon emission quota required to meet the national GDP energy intensity target, and allocate the emission quota. The theoretical framework consists of three basic approaches - “top-down”, “bottom-up” and “the integration” approaches, and assumes key parameters such as CO2 emission intensity target, contribution of emission abatement from ETS, coverage range of ETS, and industry emissions standards. Based on actual data from 2011, we forecast development of China’s thermal power industry into 2020 under different official planning scenarios. With the approaches proposed, we show on to adjust the emissions benchmarking at technology level for reaching expected contribution of emissions abatement from ETS. The proposed methodology is informative to ETS market regulators and power utilities.