EconPapers    
Economics at your fingertips  
 

A Comparative Analysis of Separate and Joint Environmental Rights Trading Markets in China

Tianyu Luo and Hongmin Chen ()
Additional contact information
Tianyu Luo: Department of Environmental Science and Engineering, Fudan University, Shanghai 200438, China
Hongmin Chen: Department of Environmental Science and Engineering, Fudan University, Shanghai 200438, China

Sustainability, 2023, vol. 15, issue 7, 1-17

Abstract: The structuring of effective market-based environmental rights instruments can help to achieve energy efficiency and emission reduction goals while minimizing economic costs. As part of the global drive for sustainable development, pollution rights, carbon emission permits, and white certificates have become widely used as environmental rights trading schemes in many countries. However, interactions between environmental rights can create challenges. For instance, China has established a national carbon market, which it aims to connect with the energy consumption permit trading market. The effectiveness of separate and joint markets in achieving win-win outcomes is an area that requires further research. To address this question, we employed a mixed-integer linear programming model to simulate the potential incremental outputs and energy savings of 16 high-energy-consuming and high-emission industries in China from 2010 to 2019. Our findings indicate that the joint energy consumption permits and the carbon emission permits market yield the greatest economic benefits, but they lack a distinct advantage compared to the separate carbon market. Additionally, industries face less pressure to ensure energy savings in the joint market. The energy saving ratio of the joint market is 0.1% lower than that of the separate carbon market. We also found that the construction of a joint market will incur additional costs for firms and governments. Based on our benefit and cost analysis, we propose that governance subjects of pilot cities prioritize the establishment of the carbon market and not the rapid expansion of the pilot-level scope of energy consumption permits.

Keywords: carbon emission permit; energy consumption permit; trading scheme; linear programming (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/7/6036/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/7/6036/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:7:p:6036-:d:1112301

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().

 
Page updated 2025-03-19
Handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:6036-:d:1112301