The Study On Carbon Allowance Distribution System Of China

The paper consists of5parts or7chapters. The first part (chapter1and2) illustrates the concept of allowances allocation and review the literatures; the second part (chapter3) introduces theories which support the institution; the third part (chapter4and5) introduces the conformation of Carbon allowances allocation; the forth part (chapter6) analyses the free and auction allocation approaches; and the last part (chapter7) proposes institutional design of Chinese carbon allowances allocation.Part1(chapter1and2) is made up of two sections:(1) The concept of allowances allocation. In any domestic emissions trading system, the most difficult and important single step is the initial allocation of allowances. It is the allocation that determines both the ultimate significance of the system, and which determines the distribution of costs and benefits amongst the participants.(2) Literature Review. The author retrospects the research about the emissions trading system, the allowances allocation and the competitiveness issues, points out most articles are focus on the experience of EU ETS and US, lacking the analysis about Chinese energy consumption and industries.Part2(chapter3) introduces theories which support the allowances allocation institution. The author analysis it from three aspects:a) Ethics foundation, which introduces the necessity, feasibility and fairness of the institution; b)Legal foundation, which introduces from nomology, international law and domestic law aspects; c) Economic Foundation, which prove the effectiveness of the allocation.Part3(chapter4and5) is the core of the dissertation. The author introduces the history of the carbon allowances allocation, points out the framework of the situation, which includes the cap, the principles, industries and installation covered, approaches of the allocations, conditions and procedures. Then studies the basic approaches of the allocation:grandfathering, benchmarking and auction.Part4(chapter6) is about the competitiveness effects of the allocations. According to the data from the government, the author calculates the energy intensity and trade intensity of23sectors, implicates their risk degree and point out that the energy intensity was negatively correlated with the trade intensity in Chinese industries.Part5(chapter7)"Institutional Design of Chinese Carbon Allowances Allocation" is the application of the previous study. The proposals are as follows:1. We should implement three main principles of allocations:environmental effectiveness, economic efficiency and preserving competition.2. We should carry out the system by two phases. In the phase1the allocation system could over four main energy-intensity sectors, which is power sector, Non-metallic mineral products industry (cement), Metal smelting and rolling processing industry(iron and steel), Paper and paper products industry. In the phase2the system can spread to other energy-intensity sectors, such as chemical industry.3. We should apply grandfathering, benchmarking mixed auction allocation rule, according to the different sectors.4. We should offer allowances to the new entrants for free, and let the closed installations reserve the allowances.