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This paper investigates the optimal strategies for an economic constrained closed-loop supply chain network. Manufacturers are classified into two categories namely low-emission manufacturers and high-emission manufacturers, and are subject to two greenhouse gas (GHG) emission control policies. Low-emission manufacturers are equipped with green production technologies to achieve ecological goals. All manufacturers are responsible in recycling and remanufacturing processes. New products and remanufactured products are homogeneous, and have the same sales price in the demand markets. Based on the variational inequality (VI) theory, we obtain the control equilibrium conditions of the non-cooperative game theory model for each firm. We further solve the model with the modified projection algorithm, and statically analyze and compare the influence of relevant parameters such as carbon quota, consumers’ low carbon preference and recovery rate on the network state through numerical examples. The results show that the GHG emission constraint may stimulate manufacturers to increase green technology investment level. Moreover, the introduction of reverse channel will promote resource recycling, but impair manufacturers’ profits. The promotion of consumer's environmental protection awareness has positive influence on the operation of supply chain network. In general, there is a conflict between economic goals and ecological ones. However, the developed model proves that economic goals and ecological ones can be realized consistently under certain conditions.

NO: Carbon markets are theoretically flawed and practically ineffective The case for carbon markets and greenhouse gas emissions trading has emerged out of welfare economics and the field of neoclassical economics more broadly. But the arguments in favour of emissions trading rest on questionable definitions of market externalities; an insufficient theory of economic incentives; a questionable approach to ecological processes; and on unreliable assumptions about market structures/dynamics. This essay argues against carbon markets as an adequate way to address climate change by exposing the limitations of neoclassical economic orthodoxy as a justification for emissions trading and by offering evidence of the weak efficacy of emissions trading in practice. Over decades of practice, experiments in carbon markets have led to very little substantive change in the emissions profiles of industrial sectors and nations where trading schemes and carbon offset markets operate.

Purpose This paper aims to minimize the total carbon emissions and costs and also maximize the total social benefits. Design/methodology/approach The present study develops a mathematical model for a closed-loop supply chain network of perishable products so that considers the vital aspects of sustainability across the life cycle of the supply chain network. To evaluate carbon emissions, two different regulating policies are studied. Findings According to the obtained results, increasing the lifetime of the perishable products improves the incorporated objective function (IOF) in both the carbon cap-and-trade model and the model with a strict cap on carbon emission while the solving time increases in both models. Moreover, the computational efficiency of the carbon cap-and-trade model is higher than that of the model with a strict cap, but its value of the IOF is worse. Results indicate that efficient policies for carbon management will support planners to achieve sustainability in a cost-effectively manner. Originality/value This research proposes a mathematical model for the sustainable closed-loop supply chain of perishable products that applies the significant aspects of sustainability across the life cycle of the supply chain network. Regional economic value, regional development, unemployment rate and the number of job opportunities created in the regions are considered as the social dimension.

This paper discusses the impact of cap-and-trade mechanisms, including grandfathering and benchmarking mechanisms, on renewable energy investments and marketing efforts in the electricity market. The current system constructs a two-level electricity supply chain, with a leader's electricity generator and a follower's electricity retailer. Based on the analysis framework of the game theory, the optimal solutions under the grandfathering mechanism and benchmarking mechanism are compared. The results are as follows. First, grandfathering and benchmarking are both conducive to the investment of renewable energy. Further, the benchmarking mechanism is more conducive to investments. Second, benchmarking is beneficial to marketing efforts, while grandfathering is not. Third, the grandfathering mechanism and benchmarking mechanism are conducive to the improvement of market demands. Further, grandfathering produces more total carbon emissions, while benchmarking reduces the total carbon emissions.

Background Carbon emissions and global warming have increased as a result of population growth and greater usage of fossil fuels. Finding a long-term replacement for fossil fuels, such as biofuels, has become a major problem for energy supply management in recent years. Sustainability must be addressed as a key problem in building biofuel supply chains (BSCs), given the pressing need for societies to limit environmental consequences and promote social responsibility of company activities. Various modeling frameworks have been established so far to design a BSC. At the same time, no research exists that examines both the sustainable development paradigm and the influence of various carbon regulatory policies on the strategic and operational decisions made by BSCs. Methods This study develops a multi-objective, multi-period, multi-echelon BSC from switch grass regarding the economic, environmental and social aspects of sustainability. Four carbon policies are taken into account when assessing the environmental aspect: the carbon cap, the carbon tax, the carbon trade, and the carbon offset. To solve the multi-objective model, the fuzzy interactive programming method is used, and the fuzzy best–worst method is used to weight the social objective components. Results An actual case study in Iran is studied to demonstrate the model’s applicability. Under various carbon policies, different network configurations are obtained based on the location of switch grass resources and installed facilities. Biofuel production and transportation activities account for approximately 28% and 51% of total carbon emissions, respectively, according to numerical results. Furthermore, these activities account for roughly 62% of overall expenses. In the suggested case study, implementing the carbon trade policy reduces carbon emissions by more than 30% while increasing total profit by about 27%. In comparison to other policies, the carbon trade policy has a substantial impact on enhancing social considerations. Overall, the carbon trade policy can greatly improve the economic and environmental components of sustainability without significantly decreasing in the social sustainability. Conclusions The proposed model can assist policymakers and governments in simultaneously optimizing BSC profitability, carbon emission reduction, and social concern.

The European Union (EU) Emissions Trading System is the most important means for the EU to achieve carbon neutrality, but it has been severely affected by the outbreak of COVID-19 in Europe, and carbon price have fluctuated sharply. Research on the driving factors of carbon price during this period will help maintain the stability of the carbon emissions trading market and promote the realization of carbon neutrality. This study selected the EU carbon allowance futures price as the research object and applied the Bai-Perron structural break test to analyze the factors that influences carbon price fluctuations using the Johansen cointegration technique and the Newey-West regression estimation. Studies have shown that the outbreak of COVID-19 and the "€750 billion green recovery plan" both had a significant impact on EU carbon price. Carbon price has also undergone significant structural changes. Under the influence of these two factors, the relationship between the level of economic development and carbon price displayed a short-term negative correlation. At the same time, oil price and interbank dismantling rates were also important factors affecting carbon price, while the impact of the clean development mechanism on carbon price was not significant. The study confirmed the effectiveness of the EU's "green recovery plan" in stabilizing the carbon market during the COVID-19 pandemic and will provide a reference for the formulation of economic recovery policies of countries around the world.

Due to the high utilization of carbon results to environmental problems in most provinces in Indonesia, it can be concluded that Indonesia in urgently requires mechanism to solve environmental issues. Many attempts have been conducted by Government of Indonesia to solve the issues such as ratification of Kyoto Protocol and Paris Agreement, further the proposal on Nusantara Carbon Scheme (Skema Karbon Nusantara abbreviated as “SKN”). Unfortunately, the proposal has not adopted yet up to 2021. Calculating based on current situation, Indonesia's greenhouse gas emissions are predicted to increase to 1.573 and 1.751 MtCO2e in 2030, which contrary to the commitment under Nationally Determined Contribution (NDC). There are several options of mechanism to be adopted, the most popular mechanism that deems highly effective are cap and trade as well as carbon tax. Many mechanisms adopted in different countries, it is important to assess which mechanism is more effective to be applied in Indonesia. Therefore, this research is conducted to assess difference on the effectiveness on carbon tax and cap and trade, examine current Indonesia’s stance towards the issue, and assess legal principle to be considered when applying the mechanism in Indonesia.Keywords: Carbon Tax, Cap and Trade, IndonesiaJEL Classifications: K32, K34DOI: https://doi.org/10.32479/ijeep.11375

Since its founding institutions the European Economic Community and Eratom, the European Union has paid great attention to energy issues. However, its powers have been updated in relatively recent times. Similarly, the EU has promoted in the post-Kyoto Protocol environmental issues with a leading by example approach and implementing an ambitious plan to decarbonize the economy with the energy transition and emission limitation through a market instrument, the emission trading system. The European emissions trading system has been the most ambitious management of negative externalities related to GHG set-up at the international level. The EU now considers that the costs of ecological industrial transition could limit the ability of European industries to compete in the globalized market with industries not subject to similar limits and costs. The EU intends to adopt a carbon adjustment tax at the border, to limit the phenomenon of reallocation and compensate for environmental costs. This paper analyses the various proposals and their advantages and disadvantages. The focus is on the charge on emissions mechanism, which is one of the three proposals the European Economic and Social Committee suggested to the European Commission for further investigation in view of the current competitive asymmetry now recognized by the EU Commission itself. The charge on emissions would value industrial emissions directly within the VAT and use the blockchain to track the emissive supply chain of products.

In recent years, as a result of the rapid increase in population and industrial development, the need for energy has increased. Many investments are made especially for electrical energy which is an inevitable requirement for the industry. Most of these investments are made by using fossil resources in countries’ lands. Fossil sources are known to be consumable as well as too poisonous gases they give to the atmosphere during energy production. This situation causes global climate change. To prevent climate change, the carbon emitted to the atmosphere has to be brought under a certain control mechanism. In this context, the first Kyoto Protocol and then Paris Climate Agreement was signed. Under these agreements, countries will be responsible for the level of their greenhouse gases in the atmosphere. This situation led to the carbon trade among countries. This situation accelerated the transition of countries from fossil sources to renewable energy sources. In this study, the effect of hydroelectric power plants, one of the renewable energy sources, on carbon emissions was investigated. According to the results, based on fossil sources of 408,533.57 tCO2 per year from Turkey Gokcekaya dam has been shown to reduce the carbon footprint.

Emissions trading schemes (ETSs) have been a central component of international climate change policies, as a carbon pricing tool to achieve emissions reduction targets. Forest carbon offset credits have been leveraged in many ETSs to efficiently meet emission reduction targets, yet there is little knowledge about the perceptions, experiences, and challenges associated with the forest carbon offsetting in existing and pilot ETS. Given that the future inclusion of forest carbon offset in ETS management activities and policies will require strong support and acceptability among the institutions and experts involved in ETS, this study explores the experiences and lessons learned with 16 globally engaging experts representing major existing ETSs (North America, Europe, and New Zealand) and Chinese pilot ETSs towards the inclusion of forestry offsets, major concerns and challenges with existing implementation models. Findings revealed that many respondents particularly from North America, New Zealand, and Chinese pilot systems portrayed positive attitudes toward the inclusion of forestry carbon offsets and its role in contributing to a viable ETS, while European experts were not supportive. Respondents cited leakage, permanence, additionality, and monitoring design features as the major challenges and concerns that inhibit the expansion and inclusion of forest carbon offsetting. Respondents from Chinese pilot schemes referenced a unique set of challenges related to implementation, including the increasing cost of afforestation and reforestation projects, the uncertainty in the future supply and demand for their national Certified Emissions Reduction (CER) scheme and landowner engagement. Existing and future ETSs should learn from and address the challenges experienced by global experts and carbon pricing mechanisms to design, evaluate, or enhance their forest carbon offset programs for an effective and viable system that successfully contributes to GHG mitigation practices globally. We recommend inclusion of forest carbon offsets at the early stages of ETS improves the perceptions and experience of policy makers and practitioners toward the success and potential of forestry offsets in ETS ensuring familiarity and confidence in the mechanism.

One of the biggest challenges facing the tourism industry is carbon dioxide emissions resulting from the greenhouse gases emitted from aviation indispensable for tourism. Thus, governments have introduced emission permits trading to the aviation industry. However, as this is in the introductory stages, it is unclear how this environmental policy will influence tourism and the environment and whether the policy can contribute to the decarbonisation of the aviation industry. Using an R&D-based growth model considering aviation for tourism, this study investigates how introducing emissions permit trading in aviation influences tourism-led growth and sustainable tourism. Domestic tourism aviation, and not international tourism aviation, was considered because it is estimated that the former short-distance aviation movements emit more greenhouse gases than the latter. The findings demonstrate that fewer permits lead to sustainable tourism despite a generous permit allocation for the manufacturing sector if the goal of tourism-led growth is excluded. This is because the policy improves environmental quality and results in a trade-off between tourism consumption and the economic growth rate. For a generous permit allocation in aviation, the policy leads to decreased tourism consumption and pollution-intensive aviation. These findings imply that emissions permit trading between the aviation and manufacturing sectors inhibits the compatibility of tourism-led growth and sustainable tourism. Finally, this study suggests that sustainable tourism could be realised when manufacturing countries such as Germany and the UK increase aviation permits, while tourism countries such as Spain and Italy decrease aviation permits.

We study profit allocation rules for joint replenishment among retailers under a carbon cap-and-trade policy. In particular, we consider retailers’ altruistic behavior when designing the profit allocation rules. We show that joint replenishment can increase participants’ total profit and reduce their total amount of carbon emissions. To allocate the total profit from joint replenishment to the retailers, we introduce a joint replenishment game with the carbon cap-and-trade policy. We show this game is convex and propose a profit allocation rule lying in the core of this game. Based on this, we further design an altruistic profit allocation rule by categorizing retailers into efficient ones and non-efficient ones, with the efficient retailers being altruistic who will transfer their surplus carbon allowance to those non-efficient ones. We show that our proposed altruistic profit allocation rule lies in the core of this game. Moreover, we derive results concerning how much carbon allowance, to whom and at what price retailers are willing to transfer in the grand coalition, by considering their altruistic parameters. Our results show that the retailer with the highest altruistic parameter value obtains all the surplus carbon allowance from other retailers, and this particular retailer transfers his surplus carbon allowance to the retailer with the second-highest altruistic parameter value. These results indicate that people do not help other people uniformly; rather, they do so according to the generosity of other people. Based on these results, we derive another altruistic profit allocation rule which also belongs to the core of the game.

Greenhouse gas emissions have gradually became an important problem hindering the sustainable development of human beings. This paper considers the carbon emissions generated by the manufacturer during the product warranty process. The impacts of cap-and-trade regulation on product warranty policy and carbon emission reduction strategy are studied. According to Stackelberg theory, two supply chain game models are established. In Model I, market demand only depends on the selling price and warranty period of the product. In Model II, the carbon emission reduction level of the product is also considered as a new important factor affecting market demand. The optimal decisions of Model I and Model II in the centralized and decentralized game structure are solved and a revenue-sharing contract is proposed to coordinate the low-carbon supply chain. According to theory analysis, the following conclusions are obtained: (1) Compared with Model I, the key decisions in Model II have better response. (2) Under all game structures, the products in the centralized scheme have higher carbon emission reduction levels and warranty periods. (3) The unit carbon trading price has a negative correlation with the carbon emission reduction level and warranty period of the product. Eventually, through a set of numerical experiments, the validity of the proposed contract is verified and sensitivity analysis on key parameters of the optimal strategies of the two models under different game policies is performed.

Reduction of emissions from deforestation and forest degradation (REDD+) is an internationally accepted mechanism for encouraging developing countries to contribute to climate change mitigation by reducing greenhouse gas emissions (GHGs) by preventing forest loss and degradation; and by increasing removal of GHGs from the earth’s atmosphere through the conservation, management and expansion of forests. This mechanism, however, has failed to bring the desired results in the Bale Eco-Region. Thus, the purpose of this study is to identify the main challenges of forest governance in addressing the implementation of REDD+ projects. Mixed research approach was employed. Relevant qualitative data were gathered through key informant interviews and focus group discussions. Quantitative data were collected through questionnaires. This study revealed that the community produced a total of 5.5 million metric tons of carbon dioxide equivalent in three years (between 2012 and 2015) as a contribution to the global environment. But, they were not received any economic incentives from the REDD+. Generally, while implementing the REDD+ project, forest governance of the Bale Eco-Region has faced different challenges, such as weak institutional arrangements, continuation of deforestation, low enforcement capacity, low economic benefit of the community, lack of strong coordination with media and research institutes, conflict of interest among sectors over forest land, and lack of adequate budget and logistics to undertake proper monitoring and evaluation. All these challenges have in one way or another contributed to the failure of the REDD+ project in the Bale Eco-Region.

China is currently the world's largest producer and consumer of iron and steel. This industry is one of the most energy- and emission-intensive industries in China. It is unsuspicious that energy conservation and emission reduction in this industry are crucial for China to fulfill its obligations of reducing greenhouse gas emission and mitigating global climate change. An appropriate allocation of CO2 emissions permit is the most important precondition for establishing an efficient and effective emissions trading system that had recently been launched in China's pilot regions. This paper proposes a new emissions permit allocation method based on a Nash equilibrium data envelopment analysis model. This method is more appropriate in emissions permit allocation for China's iron and steel firms in an imperfectly competitive market where the product price is endogenous. A noncooperative game is formulated and the mixed complementarity problem is utilized to identify a Nash equilibrium in the allocation of emissions permit (AEP). The most up-to-date AEP using a unique data set of China's major iron and steel enterprises in 2014 is provided in this paper. The results show that the AEP improves the desirable output generation by satisfying the reduction targets of the undesirable outputs.

Mainstream economics attributes climate change to negative externalities of carbon emissions and the lack of climate property rights. Although market-based strategies such as emission trading are w...

This paper develops theory suggesting that, relative to purely domestic firms, multinational enterprises (MNE) have greater incentives and strategic and operational means to respond to expanding carbon emissions constraints. We test our resulting hypotheses with data on changes in carbon emissions by over 6,000 industrial plants during Phase 2 (2008–2012) of the European Union’s Emissions Trading Scheme. We find that MNE maintain: (1) consistent carbon reductions across institutional contexts, and (2) an overall carbon performance edge over domestic firms. The carbon performance gap between MNEs and domestic firms narrowed, however, in host countries transitioning towards more stringent market regulatory systems. By demonstrating that the effects of national and international carbon regulations on firm behavior interact in important ways with each other and with firm characteristics, this paper deepens understanding of how institutions are likely to shape the ongoing energy transition towards a low-carbon economy.

The purpose of this study is to test whether Korea’s emission trading scheme (KETS) was effective in curbing GHG emissions in the three major emitting sectors during the first commitment period (2015–2017). The merged dataset, which contains GHG emissions, the amount of free allowances, fuel use and sales at the firm level, and market price information for fuels and Korea’s allowance units (KAU), was used for the empirical exercise in this paper. Our research show that the adoption of the KETS was effective in improving the carbon intensity of KETS-regulated entities in the manufacturing and building sectors, but not in the power sector. The reduction burden, defined as the proportion of the expected emission level to the amount of free allowances allocated before the complying year starts, was shown to be critical in altering CO2 emission characteristics of covered entities in the manufacturing and building sectors. This paper’s empirical findings also suggest that the development of a pricing scheme reflects carbon costs in electricity prices, In addition to the stringency in free allowances allocated to large emitters, is necessary to mitigate CO2 emissions in the power sector.

The e-waste problem needs be tackled under a global framework, based upon the understanding that e-waste is a global issue and thus a shared responsibility. To illustrate this point, a cost-benefit analysis of metal recovery from e-waste was conducted with Europe, North America and China as representative regions of e-waste producers. The final profit associated with the entire e-waste recycling process was estimated by deducing the energy costs of metal recovery from the revenues of the manually dismantling stage and the metal recovery stage. Then, the potential job opportunities were estimated based on the final profit from the local e-waste recycling and average wage per year. Overall, profits of manually dismantling 1 ton of e-waste varied widely, but the final profits were positive. The potential job opportunities generated by local e-waste recycling ranged from 4.65 × 105 person/year for North America to 2.03 × 106 for China person/year. According to our study, the environmental load of 1 kg of e-waste would be 1–9 USD, indicating that this is the cost required to offset the environmental consequences of each kilogram of e-waste. By applying environmental load to per capita, the concept can act as a tool to encourage countries to fairly share the environmental responsibility of e-waste based on their e-waste generation. Based on this, we propose an e-waste emissions trading system that set a cap on the total amount of e-waste that could be generated globally and per country, to reduce e-waste and carbon emissions.

Purpose Legislation plays a vital role in solving carbon emissions reduction and climate change issues. China began to implement a low-carbon economic policy in 2010, but the effect of the policy needs to be evaluated. Accordingly, this paper aims to discuss China’s low-carbon policy through exploring the following two questions, namely, whether the policy effect reaches the expected goal and whether the policy effects will balance economic development and emission reduction. Then, the paper puts forward suggestions for the improvement of China’s low-carbon policy. Design/methodology/approach This paper is organized around three distinct aspects of policy effect evaluation. This paper uses the synthetic control method to construct a policy effect evaluation model and conducts a quasi-natural experiment. The paper selects annual panel data from 2003 to 2015, which is selected from 33 provinces. A comparative analysis of carbon dioxide emissions, energy consumption and economic development between Hubei Province and Liaoning Province. Findings The results reveal that the implementation of the low-carbon pilot province policy in 2010 has a significant impact on the emission reduction effect of Liaoning Province, but the impact on the emission reduction effect of Hubei Province is not significant. The carbon emission trading system implemented in 2012 has reduced the emission reductions in Hubei Province and Liaoning Province has achieved better emission reduction effects after the implementation of this policy. After the implementation of the policy, the economic development of Hubei Province has been improved, but it has not brought help to the economic development of Liaoning Province. These findings provide new insights into the use of an emissions trading system for improving economic development and ultimately facilitate the attainment of the broader goal of sustainability. Originality/value This paper proposes an innovative policy effect evaluation method by considering the status of unit gross domestic product, fixed asset investment in the energy industry, energy consumption, emission reduction technology innovation and other evaluation indicators. This paper contributes to broadening current methods of policy effect evaluation in China.

We investigate the effect of grandfathered permit allocation and abatement productivity for carbon emissions on growth rate, firms' location choices, foreign direct investment, and total pollution ...

To cope with the ever-increasing environmental regulations, high-emitting countries have established strategies to reduce greenhouse gases. Among these methods, the emission trading scheme (ETS) ha...

Incentive-based policies, such as emissions taxes and emissions permit trading schemes, are increasingly used to regulate greenhouse gas (GHG) emissions in many jurisdictions around the world. Taxes impose a fixed price on emissions, whereas under tradable permit schemes prices emerge in the secondary permit market. The delayed price discovery under tradable permit schemes creates uncertainty about the future cost of compliance that liable emitters will face. To mitigate this uncertainty, some jurisdictions, including Australia, have designed policies to regulate GHG emissions that commence with an emissions tax that is in force for several years, subsequently transforming into a tradable permit scheme. This paper examines the effects that this type of staged transition – from no regulation to a regulation by an emissions tax, to a regulation by tradable permits – has on several criteria of interest: abatement investment, quantity of emissions, permit prices and overall regulation efficiency. The effects of the regulation that employs an intertemporal mix of policy instruments are compared to the effects observable under regulation using single policy instrument: a tax only, and a tradable permit only regulation. Economics experiments in a laboratory were used to study economic behaviour under these three types of regulation. The findings suggest that a regulation based on a staged transition from a tax to a tradable permit scheme results in more socially desirable outcomes on a range of criteria when compared to a regulation based solely on tradable permits.

This study provides evidence on the probability of adopting an accounting approach for emission allowances and greenhouse gas emissions as a function of each company's GHG emissions performance. The different accounting treatments adopted by national standard-setters and the lack of specific guidance from the International Accounting Standard Board (IASB) allow identification of the use of multiple accounting approaches. Based on a sample of 85 companies registered with the Portuguese, Spanish, and French National Plans of Allocation, data collected from the annual reports were analysed for the period 2008-2014. The results suggest that the probability of adopting omission strategies is positively associated with better GHG emissions performances. It addresses the importance of introducing the transactions of the European Union Emissions Trading Scheme (EU ETS) in financial reporting as the visibility of the costs of polluting is one of the purposes of the market mechanism.

Received 28.12.2020. The article examines the comparative influence of the Council of the European Union and the European Parliament in the ordinary legislative procedure using the example of the EU Emissions Trading System (ETS) reform. The study was carried out on the basis of a process tracing method. Primary data includes documents reflecting positions of the actors (summary of consultations, position papers, statements) and the progress of the legislative process (Commission proposal, EP amendments, discussions in the Council, final text of the directive). In total, 21 important elements of the reform were analysed, on which the positions of the European Parliament and the Council diverged significantly. The following conclusions are made. 1) The case study provides a relevant example of the consensual nature of the EU decision-making. 2) The case study confirms that the essence of the legislative process in the EU is not a confrontation, but an faithful cooperation of both co-legislators. 3) The Commission and both co-legislators were significantly limited by the decision of the European Council, which fixed most of the basic parameters of the ETS phase IV. This corresponds to the trend of new intergovernmentalism. 4) The study of comparative influence of both co-legislators on the final text of the directive demonstrates that the member states played a decisive role in the ETS reform, and the final provisions of the directive reflect primarily the balance of interests and influence in the Council. The study shows how the interests of certain groups of the EU member states, in particular of CEE countries, were taken into account. The influence of the European Parliament on the legislative process is greater than that of individual countries, even the biggest ones, but it is no more than a quarter of the influence of the Council as an actor. 5) The study identifies a number of factors that enable the European Parliament to uphold its position more effectively. Acknowledgments. The article has been supported by the Institute of International Studies of the MGIMO-University. Project No. 2022-02-01.

Carbon trading is an effective measure for the road transportation to reduce energy consumption and carbon emissions. Carbon emission quotas are the primary concern to ensuring the efficiency of carbon trading. However, the existing studies have mostly focused on carbon emission quotas in different regions, i.e., countries and provinces. Few literature studies simulate carbon quota allocation in the road transportation. A novel approach from the perspective of carbon emission intensity of vehicle is proposed, on the basis of data envelopment analysis (DEA) model. Unlike other studies, the idea of allocation of baseline excitation is introduced and the intensity is included in the model as the baseline. Firstly, the Delphi method is employed to select input and output indicators. Secondly, carbon emission intensity is determined by the cumulative distribution function (CDF). Furthermore, the carbon emission quotas in road transportation in 30 provinces of China are used to validate the model. The results show that (1) the carbon emission intensity of commercial trucks and buses in China’s road transport industry is 75.04 g/t·km and 13.12 g/p·km, respectively; (2) the provinces of Shanghai, Guangdong, and Xinjiang have the greatest carbon reduction potential and Henan, Hunan, and Anhui have the largest increase in emission quotas; (3) compared with traditional “history responsibility” and “baseline” methods, the proposed approach increases allocation efficiency by 19% and 14%, respectively; and (4) the approach can make the carbon emission quotas play the role of incentive while taking fairness into account and can more effectively promote the implementation of carbon trading system in road transportation.

This paper presents a model for parallel replacement and improvement for a fleet of assets to minimize both the economic costs and greenhouse gas (GHG) emissions where the emissions are limited by ...

As the largest carbon emitter, China has launched the emissions trading scheme (ETS) in 2013. Since then, whether ETS in China really help reduce carbon emissions has become a hot-button issue. By far, scholars tend to offer the macro-level empirical evidence, and the conclusions are at best mixed. Therefore, we try to reveal the effect of China's ETS from the micro level by focusing on the policy executors, herein the pilot firms. Based on the data of listed firms from 2009 to 2017, we employ the Propensity Score Matching–Difference in Differences method (PSM-DID) to estimate the causal effect of ETS. The results suggest that ETS has come into play to a certain extent (a reduction of 129.588 million tons' carbon emissions), but the effect attenuates over time. Meanwhile, the effect is more pronounced among small-scale firms and non-state-owned firms, as well as those pilot regions adopting systems of ex-post allowance allocation. Therefore, in the process of the national ETS, ex-post allowance allocation should be widely promoted, and more attentions should be given to effectively stimulating the emission reduction capacity of large-scale firms and state-owned firms.

This paper investigates a remanufacturing closed-loop supply chain under the cap-and-trade regulation, where the collecting operations can be carried out by a manufacturer or a retailer or a third party. We construct models with and without remanufacturing to show the value of remanufacturing. The results indicate that remanufacturing can effectively improve the level of carbon emission reduction and the profits of the manufacturer and the retailer. For models with remanufacturing, we find that, interestingly, the result in the previous literature does not always hold. Specifically, the manufacturer will choose the third-party collecting mode when the unit carbon emissions in take-back process in the retailer collecting mode are much larger than those in the third-party collecting mode and the unit cost savings are relatively low, otherwise the manufacturer will choose the retailer collecting mode. As the numerical analysis shown, when the manufacturer subjects to a stringent emission control, total carbon emissions are always the lowest in the third-party collecting mode. The manufacturer's optimal collecting mode, whether is the retailer collecting mode or the third-party collecting mode, may result in the most carbon emissions when the carbon price is relatively low or the carbon intensity is high.

Emissions trading is a cost-effective climate policy for reducing greenhouse gas emissions. It could also be useful for addressing road transport emissions, especially given that this sector is the...

We analyze the impacts of emission trading on the decision making of firms. Under the assumptions that firms treat emissions as inputs in production, pay for reducing emissions, and sell or buy emission permits, we propose a simple model for profit-maximizing firm’s optimal decision making on emissions, abatements, and permits. We use equations derived from the model to estimate emission behaviors of firms in 2015 and 2016. The empirical results are summarized as follows. First, industries with higher valued-added or more patents tend to reduce emissions more. Second, industries with a higher market concentration tend to emit more. Third, net-additional allocations (one of policy variables) are significantly positively related to emissions. Fourth, permit price has a significant negative effect on emissions. This result is noteworthy because it shows permit prices cause firms to reduce emissions, despite the investigation being limited to the early stage of emission trading.

The European Union Emissions Trading Scheme (EU ETS) was created to reduce greenhouse gas emissions. Companies producing carbon emissions have to manage associated cash flows by buying or selling carbon allowances. Moreover, future carbon prices could affect company decision making on decarbonization technology investments. In this paper, we forecasted short-term future carbon allowance prices using an artificial intelligence tool: a neural network. The resulting mean error was 1.7617 %. This is indicative of very good performance for a time series whose evolution is influenced by subjective economic and political decisions. The inclusion in the forecasting model of variables possibly directly related to the evolution of the price of CO2 emission allowances did not improve prediction accuracy. Therefore, we can assume that emission allowances evolve following a random path. The neural network provided reliable predictions which agents selling or buying allowances can use to make their decisions.

This paper analyzes the effects of carbon pricing on the economy, focusing specifically on the power sector under retail-price control. A simulation analysis using a CGE model implicates that it is desirable not to bestow the power sector with carbon pricing waiver to avoid a severe burden to the economy in terms of real GDP and real consumption. And excessive carbon price burden on GHG emissions in the power sector under Korean emissions trading system, where not only direct but also indirect emissions are covered, can and needs to be relieved through intensity-based (output-based) updating allocation of allowances to the power sector. Finally, we have reached a somewhat counter-intuitive conclusion that we can achieve higher economic efficiency by treating both fossil and non-fossil power plants equally when implementing the output-based updating allowance allocation for the power sector.

As China’s national carbon emissions trading system (ETS) is counting down to establishment, experience and lessons from pilot ETSs are of great value, which come from assessment of the implementation effectiveness, especially how the covered entities are affected. To understand how well the pilot ETSs have operated and how entities behave, the research conducted two questionnaire surveys among covered entities in the pilot ETSs in 2015 and 2018. The surveys investigate how strictly rules have been enforced for monitoring, reporting and verification (MRV) and compliance. Inquiries are also made about the pressure imposed by ETSs and the abatement actions that covered entities have taken in consequence. The results show that (1) while compliance procedures and measures have become routine, further improvement is required regarding enforcement of MRV rules in certain pilots; (2) the free allowance allocation methods tend to be tightened though the allocation results at present are much likely to be “approximately balanced”; (3) almost all of the entities surveyed have developed emission abatement strategies with a significant improvement compared to the survey in 2015, but nearly half of the entities have no explicit emission reduction targets along with limited perception of marginal abatement costs; and (4) compliance remains the dominant driver for entities to participate in emissions trading, while strategies are emerging to gain profits from emissions trading by enhancing carbon asset management capacity.

Carbon financing policies such as emission trading have been used to assist in emission mitigation worldwide. As energy end-users/consumers are the underlying driver of emissions, it would be difficult to effectively mitigate carbon emissions by creating an emission trading market without active end-users’ involvement. In electricity markets, demand side management (DSM) in the smart grid can manage demands in response to power supply conditions and influence end-users to contribute to improving both network efficiency and economic efficiency. However, it is a relatively new topic to study the environmental benefits of DSM. This paper proposes a two-stage scheduling model to comprehensively investigate the environmental benefits of consumers participating in both electricity and carbon emission trading markets through active DSM. A developed zero sum gains-data envelopment analysis (ZSG-DEA) model based multi-criteria allocation scheme for emission allocation is employed. Meanwhile, the carbon emission flow model (CEF) is applied to track the “virtual” carbon flow accompanying power flow. According to case studies on the IEEE 24-bus system and IEEE 118-bus system, the proposed model can effectively achieve carbon emission mitigation and provide consumers extra environmental benefits in some scenarios. This model can be an important guide for governments to establish emission trading schemes.

Carbon offsets allow greenhouse gas emitters to comply with an emissions cap by paying others outside of the capped sectors to reduce emissions. The first major carbon offset programme, the United ...

Global warming is one of the most alarming phenomena facing our planet today. There is a consensus among scientists that human-induced greenhouse gases (GHGs) should be regulated to slow down the heating of the Earth’s oceans and atmosphere. Energy consumption and CO2 emissions are continuously increasing in different countries, especially developing ones such as India, whose emerging economy and rapid economic development has caught the attention of the world. CO2 emission trading is executed by the various developed countries to alleviate the affect of GHG emissions. In this work, an optimal bidding strategy for a supplier has been developed, considering rival’s bidding behavior, in an hourly day-ahead pool market. Bidding problem has been formulated as a bi-level multi objective optimization problem (BLMOOP), where in the first level generator submit bid strategically to the ISO and in the next level a particle swarm optimization (PSO) approach has been employed for the maximization of social welfare with risk management. It is assumed that each generator should submit bid in sealed auction based on pay-as-bid MCP (market clearing price) mechanism with knowing the rival’s bidding behavior. The practicability of proposed optimization method is examined by an IEEE-30 bus system which consists of six suppliers.

The Western Climate Initiative (WCI) cap-and-trade programme consists of two linked carbon markets in California and Quebec. It is intended to play a central role in reducing greenhouse gas emissio...

New Zealand’s primary strategy for tackling greenhouse gas emissions is the emissions trading scheme, which puts a price on emissions from all major industries – except animal agriculture. In the d...

This study is about power generation operation of fossil fuel generators considering the greenhouse gas emissions trading market. The determination of generating power is related to fuel costs as well as consumption of the emission allowance. Therefore, the optimal generation considers both electricity market and emissions trading market at the same time. Consumption in excess of the allocated emission allowance increases sales in the electricity market, but the cost of purchasing the allowance increases. The opposite occurs when the allowance remains. The relationship between these two markets is modeled in the form of oligopolistic competition to find Nash Equilibrium(NE). The effect of marginal cost and load demand on NE is studied by analyzing the fair price for the emissions trading.

International trade plays crucial roles in the evolution of carbon emissions given the prevalence of complex global supply chains. Production reallocation across countries promotes the cross-border trade of emission-embodied products and is closely related to emission transfer or carbon trade balance, which is defined as the difference between territorial and consumption emissions. One important issue addressed in this study is how carbon trade balances relate to carbon emissions under a globalized world with fragmented production. By applying a panel-pooled mean group-autoregressive distributive lag (PMG-ARDL) model, we evaluate the long-run relevance between carbon emissions and carbon trade balances while considering the short-run dynamics over 58 countries during the period of 1990–2014. The main results reveal a positive relationship between carbon trade balances and carbon emissions for high-income countries but no clear evidence for low-income countries. Our analysis argues that a high-income country may achieve emission reduction not only by displacing production units to trading partners but also by transferring high emission-intensive production units to trading partners and by keeping low emission-intensive domestic production units. Our results provide some important implications about emissions embodied in trade and emission transfers via international trade. First, high-income countries, particularly emission importers, should have the greater responsibility for global emission issues and should continue to develop and improve energy-saving and less emission-intensive technology. Second and more importantly, high-income countries should promote spillovers of advanced green technology to trading partners when they outsource emission-intensive production units to low-income countries.

Significance International carbon markets are an appealing and increasingly popular tool to regulate carbon emissions. They put a price on carbon emissions and make pollution less attractive for regulated firms. However, carbon markets often produce prices which are deemed too low relative to the social cost of carbon. We argue that despite low prices, carbon markets can help reduce emissions. Using a statistical model and sectoral emissions data, we find that the EU ETS, which initially regulated roughly 50% of EU carbon emissions from mainly energy production and large industrial polluters, saved more than 1 billion tons of CO2 between 2008 and 2016. This translates to reductions of 3.8% of total EU-wide emissions compared to a world without the EU ETS., International carbon markets are an appealing and increasingly popular tool to regulate carbon emissions. By putting a price on carbon, carbon markets reshape incentives faced by firms and reduce the value of emissions. How effective are carbon markets? Observers have tended to infer their effectiveness from market prices. The general belief is that a carbon market needs a high price in order to reduce emissions. As a result, many observers remain skeptical of initiatives such as the European Union Emissions Trading System (EU ETS), whose price remained low (compared to the social cost of carbon). In this paper, we assess whether the EU ETS reduced CO2 emissions despite low prices. We motivate our study by documenting that a carbon market can be effective if it is a credible institution that can plausibly become more stringent in the future. In such a case, firms might cut emissions even though market prices are low. In fact, low prices can be a signal that the demand for carbon permits weakens. Thus, low prices are compatible with successful carbon markets. To assess whether the EU ETS reduced carbon emissions even as permits were cheap, we estimate counterfactual carbon emissions using an original sectoral emissions dataset. We find that the EU ETS saved about 1.2 billion tons of CO2 between 2008 and 2016 (3.8%) relative to a world without carbon markets, or almost half of what EU governments promised to reduce under their Kyoto Protocol commitments. Emission reductions in sectors covered under the EU ETS were higher.

Considering the importance of waste sorting and treatment in the development of an ecological civilization, empirically evaluating the environmental impact of such programs is particularly important. This study uses Xiao'er Township in Gong County, Sichuan Province, China as a case study to analyze and estimate the carbon emission reduction effects of the township's pilot waste sorting program. Using the five-point sampling method, samples of waste are collected, reviewed, and measured for their major components and other key indicators. Additionally, questionnaire surveys and interviews are conducted in the township, along with investigations into existing records and other relevant information. The study adopts the solid waste management-greenhouse gas (SWM-GHG) calculator to study the township data. The case study results imply that proper waste sorting and treatment methods in villages and townships could play a major role in the reduction of carbon emission. Specifically, after implementing waste sorting in Xiao'er, annual carbon emissions were reduced by 2081 tons—equivalent to the electricity consumption of a family of three people for 1718 years, or the amount of CO2 emitted by 264 1.6L vehicles driving once around the Earth. In the optimal scenario simulation, increasing the recycling of wet waste and recyclable waste further, the level of carbon emission reduction in Xiao'er could reach up to 4482 tons per year. According to the international general carbon trade price, this is equivalent to adding 44,820 US dollars to the GDP, or to an annual saving of 5.71 million kWh. If these waste management methods are expanded to villages and townships across China, then the carbon emissions reduced in a year would be equal to the CO2 emitted from electricity generation in Beijing for over a year. Based on these findings, this paper provides three policy recommendations for effective carbon emission reduction: increasing residents' environmental protection awareness over the long term, boosting funding support and enhancing the construction of supporting facilities, and strengthening governance and institutional capacity for waste sorting and treatment.

Amaç – Dünya’da Kyoto Protokolü'nün birçok ülke tarafından onaylanmasıyla birlikte karbon ticareti, karbon vergisi, düşük karbon teknolojilerine yatırım yapma, karbon salınımını azaltma ve karbon maliyetlerinin hesaplanması gibi konular işletmeler tarafından dikkate alınması gereken konular haline gelmiştir. Bu kapsamda yeni bir kavram olan “Karbon Muhasebesi” işletmeler için önemli olmuştur. Bu doğrultuda bu çalışmanın amacı maliyet muhasebesi kapsamında demir-çelik sektöründe faaliyet gösteren bir işletmede karbon maliyetlerinin hesaplanmasına yönelik bir uygulama yapmaktır. Yöntem – Karbon muhasebesi ile ilgili olarak demir-çelik sektöründe faaliyet gösteren bir işletmede örnek olay çalışması gerçekleştirilmiştir. Yapılan örnek olay çalışması ile öncelikle şirketin mevcut üretim ve muhasebe sistemleri incelenmiş, ardından 2016-2017 yıllarına ilişkin karbon emisyonları tespit edilerek, karbon ayak izi hesaplanıp, karbon emisyon maliyetlerinin toplam üretim maliyetleri içerisindeki payı belirlenmiştir. Bulgular – İşletmede yapılan araştırmaya göre işletmede proses ve yanma kaynaklı emisyonlar tespit edilmiştir. Proses kaynaklı emisyonlar alt kalemlerle değil toplam değer üzerinden incelenmiş olup yanma kaynaklı emisyonlar kömür ve doğal gazdan oluşmaktadır. İşletmede karbon ayak izi belirlemede kütle dengesi yöntemi kullanılmakta olup, 2016 yılındaki karbon ayak izi 4,78 ton CO2 emisyonu iken, 2017 yılında 4,22 ton CO2 emisyonu olduğu sonucuna ulaşılmıştır. Ayrıca 2016 yılında birim karbon maliyeti 128,04 TL/ton iken 2017 yılında bu rakam 117,95 TL/ton olarak azalmıştır. Ayrıca işletmenin 2016 ve 2017 yılında emisyon kaynaklı maliyetlerin, toplam çevresel maliyetlerin %99’unu oluşturduğu görülmektedir. Ancak bunların yanı sıra 2016 yılında işletmenin ton başına üretim maliyetleri içerisindeki karbon emisyon maliyetleri yaklaşık % 9 oranında iken, 2017 yılında ise % 8 oranına düştüğü tespit edilmiştir. Tartışma – Enerjiyi yoğun kullanan sektör olan demir çelik sektöründeki bir işletmede yapılan bu araştırmaya göre 2016 yılından 2017 yılına karbon ayak izi ve birim karbon emisyon maliyeti azalmış ayrıca birim karbon maliyetinin birim üretim maliyeti içerisindeki payı da azalma göstermiştir. Bunun yanında karbon maliyetleri, çevresel maliyetlerin büyük bir kısmını oluşturmaktadır. Bu nedenle işletmelerin karbon maliyetlerini izlemeleri, kaydetmeleri, sınıflandırmaları ve raporlamaları önemli olmaktadır. Bu çalışmanın karbon maliyetlerini belirleme konusunda işletmelere ve diğer araştırmalara kılavuz olabileceği düşünülmektedir. Purpose – The current study focuses on determining the carbon cost of a company which operates in iron and steel sector within the scope of cost accounting. As a result of approval of Kyoto Protocol by several countries, carbon focused inquires such as; carbon trade, carbon tax, investing in low carbon technologies, decreasing carbon emission and calculation of carbon cost have been essential issues that companies must concentrate on. Within this context, “Carbon Accounting” which is considered as a new concept has increasingly been significiant for the companies. Design/methodology/approach – In this study, case study method were used in a company which operates in iron and steel sector for carbon accounting. By means of this case study, first, company’s existing production and accounting systems were examined then carbon emissions, carbon footprint and share of carbon emissions in total production cost were calculated for 2016 and 2017 years. Findings – By means of this case study, emissions from the process and combustion were determined. Emissions from the process were examined by total value ,not detailed sub group, and emissions from combustion were composed of coal and natural gas. Mass balance method has been used by company to determine carbon foot print and it was determined that carbon footprint is 4,78 ton CO2 emission for year 2016 but 4,22 ton CO2 emission for year 2017. Beside, it was calculated