Allocation And Trading Carbon Credits Issues

The rapid growth and enormous amount of carbon emissions make our countryface both pressure of international and domestic. So that reducing carbon emissionshas become an inevitable choice. As the preconditions, a reasonable allocation ofcarbon rights can let the carbon trading be an effective carbon reduction tool. On thebasis of corresponding carbon trading, a reasonable allocation of carbon rightsbetween different areas and within regions will be our county’s practical policy tools.This paper will do a deep research on the allocation and trading of China’scarbon emission rights from both intra and inter-regional aspects with a lot of data.First, on the basis of existing research, this paper use micro-economics theorycombined with the distribution and characteristics of carbon rights trading to explainthe basic principle and operational mechanism of carbon trading. Then, this papercalculated the carbon emissions intensity and cumulative carbon emission percapital indicators by using the IPCC accounting method. And, with the result ofcalculating, this paper compared the advantages and disadvantages between them.Also, it applied the DEA’s directional distance function approach to study bothprovincial regions and industries’ carbon emission performance and their abatementcosts with relative data. At last, though the whole analysis, this paper use logicaldeduction method to analyze carbon trading. Through theoretical analysis andempirical research, we draw the following conclusions:(1) Compared to the historical average cumulative carbon emissions, carbonintensity targets ignores fairness, while the former ignores the right of distribution ofcarbon efficiency, which will hinder the progress of the development of China’sindustrialization.(2) Considering the fairness and efficiency, this paper used carbondioxide emissions of per capita GDP to allocate the consumption, as well as taking thecost of carbon emissions and the region differences into account. We add a coefficientwhich is less than1to developed areas of carbon emissions per unit of GDP.(3) Fromthe research data, the differences of each region’s marginal abatement cost are very big. The higher carbon emissions performance, the smaller carbon emissions smallspace, and also means higher macroeconomic costs to be paid and greater difficultythe reduction is. The carbon dioxide shadow prices of light industry is also higher thanthe absolute value of heavy industry, thus the former is more difficult to reduceemissions.(4) By establishing an inter-regional and inter-industry carbon tradingtheoretical models, this paper reached a scene of carbon trading. The result is that bycarbon trading, every single region/industry’s carbon emissions or the whole society’stotal carbon emissions has declined, so as to the carbon abatement costs.(5) thoughthe research, China’s carbon trading market mechanism should apply double track,which is from key areas, key energy consuming sectors to the national carbon rightstrading market.This paper enriched the relevant outcomes of the domestic carbon rights tradingmarket. It also put forward new carbon rights allocation which has breakthrough intheory. However Limited by the author’s own academic standard, of course, there aremany inadequacies. Limitations of this study and future research directions arementioned in the last part of this article.