Consumers Carbon Emissions Trading And Energy Consumption Under The Personal Carbon Trading Scheme

Environmental degradation and global climate warming have significantly affected the sustainable development of human society. Nowadays, most countries and regions are taken measures to cope with these problems. In general, these measures mainly include three categories:administrative command measures such as closed some energy intensive and highly polluting enterprises or let these enterprises to reduce and shut down production; Market economy means, such as implementing enterprise emissions trading and levying a carbon tax; publicity and voluntary reduce emissions measures, such as motivate and guide consumers to purchase and consume clean energy products, motivate consumers to change the unreasonable consumption pattern, advocate the low carbon life, and improve the consumers’environmental awareness. Compared these three measures, the effect of administrative command measures is direct. However, the social acceptance, the negative effect on the economic development is also the biggest. Publicity and voluntary reduce emissions measures is essentially a kind of soft constraints. It is a voluntary method and the effect is limited. Publicity and voluntary reduce emissions measures may not be a good choice. Therefore, from the perspective of economic means to formulate policies to deal with a series of problems faced by human society at present may be the best choice.It is worth noting that European Union Emissions Trading Scheme (EU-ETS), Regional Greenhouse Gas Initiative (RGGI), carbon emission trading system of Chicago climate exchange, Greenhouse Gas Emissions Trading of New South Wales, Australia, and the pilot carbon trading in China in2013are all belong to use economic means to solve environmental problems. Both these policies and trading system have a significant feature, that is they has direct effects on the producer and lack of regulation for consumers, thus weakened the reduction effects in general. Recently, academia has put forward a new concept of emission reduction, namely, Personal Carbon Trading (PCT), which is aim to reduce emissions in consumption field by marketization and economization measures. Nowadays, the academia has conducted the corresponding researches. However, given that no country has implemented the PCT, these researches mainly focus on theoretical exploration and qualitative analysis, and lack of empirical research by conducting mathematical model. In the existing researches, some details of trading have not answered, such as how to obtain the supply curve and demand curve? How to obtain the carbon price and which factors will affect the carbon price? How the carbon price affected the carbon allowance and energy consumption? Whether the implementation of PCT will significantly affected the consumer welfare and lead to substantial fluctuations in energy prices? It is valuable to study these problems to enrich the PCT theory and implement the PCT in the future.The major parts of this paper can be listed as follows:(1) Based on the property rights theory and consumer behavior theory, consumers’ energy use choice model was constructed under the personal carbon trading system to study the energy choice between clean energy and dirty energy. It is found that the energy use choice is closely related to the market price of carbon. Based on the model of energy use choice, it is easily to obtain the supply curve and demand curve and to further study the properties of the supply and demand curves. According to the demand and supply curves, we explored the effect of initial allowance allocation on carbon trading and under what circumstances the carbon trading can be reached between consumers.(2) Based on the PCT theory and the trading model, firstly, we obtained the equilibrium carbon price and explored the individual behavior characteristics and the effect mechanism under the PCT scheme. Secondly, we examined the effect of initial allowance allocation, energy price and energy emission rate on carbon price. Finally, consumers’ welfare change model was constructed to explore the effect of implementing PCT on consumers’welfare, and thus to further reveal the distributional effects that the PCT contained.(3) Based on the utility theory and price effect theory, we studied the effect of carbon price on energy consumption. It is found that for different income level consumers, the effect of carbon price on energy consumption is different. For low-income consumers, there may be exits "carbon reduction paradox", which means that when the carbon price is higher, consumers will consume more energy. In addition, we also studied the effect of carbon price on carbon allowance and explored the nature of carbon allowance. It is found that for different income level consumers, the carbon allowance demand is different and the nature of carbon allowance is also different.(4) Based on the PCT theory, we examined the buffer effect that PCT exits. We found that the total energy price will remain stable when the PCT is introduced. This result indicated that the implementation of PCT will not lead to energy price fluctuate sharply, which is beneficial to stabilize energy market and obtain reduction targets. Furthermore, we also examined the energy consumption changes before and after introduced the PCT. It is found that when the PCT is introduced, the energy consumption is more stable than not introduced. It is also suggested that to some extent the PCT can make the energy consumption remains stable.The major innovative points of this paper can be listed as follows:(1) Theoretical model innovation. Based on the utility theory, property right theory and price effect theory, the mathematical model of PCT was constructed to study the supply and demand of carbon allowance, and the market equilibrium problems. On this basis, the energy use choice model and consumer welfare model was constructed to examine the effects of PCT on energy consumption and carbon allowance. These theoretical models provide a research basis for future quantitative studies.(2) Research method innovation. So far, there is no country has implemented the PCT and the relevant empirical research is rare. The current research methods about PCT are mainly focus on cross policy study method and focus group method. In this paper, by using the method of modeling and simulation data, we examined the equilibrium price, trading volume, consumers’ energy use choices, consumers’welfare change, the nature of carbon allowance and the buffer effect that PCT exists. In fact, under the condition of lack of actual data for empirical research, modeling and data simulation may be is the scientific method to study PCT.(3) Theoretical and practical value innovation. This paper provides the basic PCT mathematical model and the research example, and concludes a series of new conclusions which can further enrich the PCT theory. In terms of practical value, the research ideas and research conclusions of this paper have some implications for China’s future energy price reforms, such as oil price reforms.