Research on Energy Trading Mechanism Based on Individual Level Carbon Quota

Di Wang (), Daozhi Zhao, Fang Chen and Xin Tang
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Di Wang: School of Accountancy, Beijing Wuzi University, Beijing 101149, China
Daozhi Zhao: College of Management and Economics, Tianjin University, Tianjin 300072, China
Fang Chen: School of Management, Research Center for Management Innovation and Evaluation, Tianjin University of Commerce, Tianjin 300134, China
Xin Tang: Shanghai Tongyi Investment Management Co., Ltd., Shanghai 200120, China

Sustainability, 2024, vol. 16, issue 13, 1-15

Abstract: High economic growth is accompanied by substantial consumption of fossil energy and significant negative externalities on the ecological environment. The global warming effect resulting from environmental pollution caused by energy has brought energy carbon emissions into the forefront of social attention. Establishing a carbon trading market is an essential measure to achieve the “double carbon” goal, with individual and household carbon emissions accounting for 70% of China’s total emissions. Constructing an individual-level carbon trading market will facilitate the efficient realization of this goal. However, addressing the challenge of handling vast amounts of data and network congestion in relation to frequent but small-scale individual carbon trading has become an urgent issue that needs to be resolved. In light of this, the present study designs a digital technology-based framework for the carbon market trading system and proposes an individual carbon asset price-based model for carbon market trading, aiming to establish a research framework for the carbon quota market. Furthermore, blockchain technology is employed as the underlying technology in the proposed carbon trading market model to cater to individual-level carbon trading services and achieve optimal matching between carbon quota suppliers, thereby enhancing profitability of the carbon trading platform. The numerical results obtained from the model demonstrate that in absence of government subsidy mechanisms, individual-level carbon trading can effectively reduce total consumer emissions. The present study successfully overcomes the carbon lock-in effect of consumer groups and achieves the generation and trading of individual carbon assets despite capital constraints. This study facilitates accumulation and trade of individual carbon resources, reduces overall consumer emissions, enhances environmental benefits at societal level, and provides a foundation for governmental decision-making.

Keywords: energy trading; carbon trading platform; carbon quota; blockchain technology (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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