Estimation of CO 2 shadow price in Chinese provinces: an output distance function approach

Yongrok Choi

International Journal of Innovation and Sustainable Development, 2012, vol. 6, issue 3, 281-289

Abstract: As the low-carbon issue become increasingly critical in the world. The marginal abatement cost (shadow price) of CO₂ emission is a determinant in the carbon emissions trading market. This paper estimates the CO₂ shadow price of different Chinese provinces based on the parametric approach: the output distance function. The results show that the average CO₂ marginal abatement cost is 1.8 Y/T (0.28 $/T), much lower than the world carbon market price. If a regional carbon Emission Trading Scheme (ETS) is introduced in China, the market price of CO₂ emission will be 0∼12 Y/T.

Keywords: ETS; emission trading scheme; shadow price; output distance function; China; marginal abatement cost; CO2; carbon dioxide; carbon emissions; carbon trading. (search for similar items in EconPapers)
Date: 2012
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