The Design Of Initial Allocation Scheme Of Carbon Emission Rights

Now all the world pay strongly attention on the problem of carbon reduction, peopletake a lot of measures to achieve this target, the most important measure is carbonemissions trading. In order to trade efficiently, people first should design the initialoptimal allocation scheme of emission rights, it determines the size of emissions of eachfirm, so affects the production plan and the benefit of each plan. Therefore, designing theoptimal initial allocation scheme of emission rights is of practical significance.This thesis firstly introduces the background, the purpose and significance of carbonemissions trading and illustrates the study situation of it, then introduces the EU emissionstrading system and makes the prospect of the development situation of China’s futurecarbon emissions tradingThis thesis extends the existing absolute performance mechanism model, consideringthe impact of the discount rate, then find that in order to getting more quotas in laterperiods, firms will increase their emissions, it’s obviously not conducive to reducingemissions. If exiting the price limits, the allocation based on firm’s history activities wouldnot be better than auction because of the higher total emissions; if allowing the bankborrowings, trading system would be difficult to achieve cost-effective emissionreduction.Then this thesis designs the relative performance mechanism model, finds theconditions that meet social optimization and firm optimization, studies the initialallocation scheme in efficient closed systems and open systems. In open systems, peopleshould allocate initial emission rights just based on external factors, and in closed systems,people should allocate initial emission rights based on external factors and firm emissions.Due to people could allocate initial emission rights just based on external factors in twosystems, thesis studies the external factors carefully. This thesis illustrates how to selectthe appropriate external factors, points out that people could achieve emission control atthe lowest cost and maximize the additional socially benefits of external factors.Finally, giving a numerical example to verify the conclusions of this thesis and presenting the problems what need further research.