Emissions trading and abatement cost savings: An estimation of China's thermal power industry

Ke Wang; Xian Zhang; Xueying Yu; Yi Ming Wei; Bin Wang

doi:10.1016/j.rser.2016.07.051

Emissions trading and abatement cost savings: An estimation of China's thermal power industry

Ke Wang, Xian Zhang^*, Xueying Yu, Yi Ming Wei, Bin Wang

^*Corresponding author for this work

Research output: Contribution to journal › Review article › peer-review

38 Citations (Scopus)

Abstract

This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities on CO₂ emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO₂, SO₂, and NO_x, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China.

Original language	English
Pages (from-to)	1005-1017
Number of pages	13
Journal	Renewable and Sustainable Energy Reviews
Volume	65
DOIs	https://doi.org/10.1016/j.rser.2016.07.051
Publication status	Published - 1 Nov 2016

Keywords

CO emissions
Data envelopment analysis
Regulatory rigidity
Synergy effect
Tradable permits

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.rser.2016.07.051

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@article{cee255a54ef547af86eb91cd60d29f82,

title = "Emissions trading and abatement cost savings: An estimation of China's thermal power industry",

abstract = "This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities on CO2 emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO2, SO2, and NOx, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China.",

keywords = "CO emissions, Data envelopment analysis, Regulatory rigidity, Synergy effect, Tradable permits",

author = "Ke Wang and Xian Zhang and Xueying Yu and Wei, {Yi Ming} and Bin Wang",

note = "Publisher Copyright: {\textcopyright} 2016 Elsevier Ltd",

year = "2016",

month = nov,

day = "1",

doi = "10.1016/j.rser.2016.07.051",

language = "English",

volume = "65",

pages = "1005--1017",

journal = "Renewable and Sustainable Energy Reviews",

issn = "1364-0321",

publisher = "Elsevier Ltd.",

}

TY - JOUR

T1 - Emissions trading and abatement cost savings

T2 - An estimation of China's thermal power industry

AU - Wang, Ke

AU - Zhang, Xian

AU - Yu, Xueying

AU - Wei, Yi Ming

AU - Wang, Bin

PY - 2016/11/1

Y1 - 2016/11/1

N2 - This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities on CO2 emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO2, SO2, and NOx, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China.

AB - This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities on CO2 emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO2, SO2, and NOx, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China.

KW - CO emissions

KW - Data envelopment analysis

KW - Regulatory rigidity

KW - Synergy effect

KW - Tradable permits

UR - http://www.scopus.com/inward/record.url?scp=84979224987&partnerID=8YFLogxK

U2 - 10.1016/j.rser.2016.07.051

DO - 10.1016/j.rser.2016.07.051

M3 - Review article

AN - SCOPUS:84979224987

SN - 1364-0321

VL - 65

SP - 1005

EP - 1017

JO - Renewable and Sustainable Energy Reviews

JF - Renewable and Sustainable Energy Reviews

ER -

Emissions trading and abatement cost savings: An estimation of China's thermal power industry

Abstract

Keywords

UN SDGs

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