Schemes Design And Hypothetical Scenario Experiments On Company Behavior Of International New Carbon Market Mechanism

The new agreement of the Paris Climate Change Conference in 2015 clearly put forward to establish the NMM in order to help Parties to achieve their intended nationally determined contributions.Currently,there is no explicit and uniform concept of the NMM in the global negotiations and academic circiles.At the same time,there is no appropriate evaluation system for analyzing and assessing the different options of design elements on the major schemes of the NMM.Besides,most studies on the NMM propose the schemes theoretically and the analysis based on company behavior and policy response is limited,which increases the uncertainty of actual operation effect of the schemes proposed.This paper deals with the above challegens in three steps.First,the concept framework on the NMM is developed to evaluate and identify major schemes through identifying four key elements that determine the concept of the NMM.Second,the design elements and their different options on the major schemes of the NMM are identified,and a comprehensive evaluation system,including environmental effectiveness,administrative feasibility,political acceptance,economic efficiency and company participation,is developed for assessing the different options in order to propose three concrete pilot schemes of the NMM.Third,there is a need to experiment on the three pilot schemes at the company level through the method of establishing the hypothetical policy scenarios in order to test amend and supplement the three pilot schemes proposed based on the comprehensive evaluation system.Key findings of this paper inculde:(1)Three feasible pilot schemes of the NMM are put forward based on the comprehensive evaluation system,including government-based sectoral crediting mechanism,tradable units-based sectoral crediting mechanism and tradable units-based sectoral trading mechanism.(2)The experiments based on the hypothetical policy scenarios at the company level test amend and supplement the key design elements,and three complete pilot schemes including 14 design elements are proposed.(3)The results of hypothetical policy scenarios experiments indicate that under the sectoral crediting mechanism,companies are most concerned about three policy attributes including domestic policy instruments,the relationship with the Clean Developing Mechanism(CDM),and the principle of Common but Differentiated Responsibilities.It needs to consider preferentially the sectors that have a low ratio of export,the high level of competitiveness and the low energy intensity.(4)Under the sectoral trading mechanism,companies are most concerned about four policy attributes including domestic policy instruments,the relationship with the CDM,the flexible mechanism and compliance period.It needs to consider preferentially the sectors that have the low level of competitiveness,advanced production technology and the low energy intensity.(5)Under policy type with government receiving tradable units,the economic incentive policy has a high company response.The company response is influenced by the energy saving potential and the average educational level of employees.Under the policy type in which installations with voluntary targets receive tradable units,the company response to a low-level emission tax is high.The response of compaies that have large scale and high level competitive pressures to holding back a small share of tradable units is low.Under the policy type in which installations with mandatory targets receive tradable units,the company response to carbon tax and emission trading system is high.The electricity sector and the sector with high international level prefer the emission trading system.