Research About Initial Allocation Of Emission Rights

There are three basic models: offset policy, rate-based emission trading and cap-and-trade policy(CAT). Initial allocation of emission rights has to be done only in CAT. In the existing CAT practice, the Acid Rain Program and the Regional Clean Incentive Marketing Plan (R Plan) for its outstanding achievements and abatement costs of control performance to become a classic case of CAT. There is little research on their country, and less on their initial allocation of emission rights scheme. In view of this, they will be analyzed in the paper to find out the general rules of design on the initial allocation of emission rights and to servise China's emission trading practice.Design idea on initial allocation scheme of emission rights is based on a knowledge of emission rights, but the knowledge of emission rights in china is not built on the basis of abundant emission trading practices. Therefore, this paper will rebuild the basic concept of emission right. By studying the U.S. understanding of emission right, emission rights in the United States that has the following two characteristics: (1)Permits are not private property, so it is not "sacred" .For public health and welfare, the use of emission rights can be restricted or even modified in the statutory conditions; (2)Emissions trading will be allowed and protected in a specific legal framework. Based on this, emission right in the context of Chinese is definited a public right granted by government, not property rights.Then, by studying initial allocation structure of emission rights in the acid rain program, it is finded that the emission trading policy desighers have to think of the initial allocation of emission rights from the market's point of view. While the emission right market is a market of the strong administration sense, and it is necessary to establish appropriate Institutional arrangements for market supply. By studying R plan when the California electricity crisis hit it, it is found that may there may be structural problems in the initial allocation scheme of emission rights. Associated in the external market turmoil, these problems may be excited. This time there are the following three aspects of risk control: (1) strengthen the technical emission reduction; (2) to increase market transparency; (3) set adjustment mechanism.Finally, on the basis of these studies, a universal design framework for initial allocation structure of emission rights is developed. The design framework is universally applicable of CAT for the gradual reduction strategy, and it will help China's environmental managers to effectively solve the problem of initial allocation of emission rights.