A Study On Mechanisms In The Tradable Emission Permits System Under Total Quantity Control Of Pollution

With the development of the society economic, the environment pollution is becoming more and more serious. Since 20th century, all of the world have taken various environment manage methods to deal with this problem. Nowadays, China give out a new thoughts of environment manage, which is total quantity control of pollution. A useful method of implementing total quantity control is the Tradable Emission Permit system(TEPs), which is proposed in 1970s and has been applied widely all over the world. But there is still some theoretic and practice problems. In our country, the TEPs has not been applied for a long time, so it's more important to make the theoretic and practice research of the TEPs.In the paper, on the background of the TEPs under the total quantity control of pollution, some theoretic and practice research of problems in TEPs is made using game theory and method. The purpose is to give out some new solutions, thoughts and advice, aiming the equity, efficient and the policy dynamic consistency in the implement of TEPs.First the paper introduces the basic concepts, the main research aspects and problems of the TEPs under total quantity control. Then the basic concepts of game theory and some mechanisms are briefly introduced. Finally the research about the TEPS using game theory and methods is summarized.Aiming to the free allocation method in the TEPs, a bargaining mechanism is given out. In the mechanism the firms bargain about the allocation of the emission permits under the condition of the government and declare the result. The basic restriction condition is analyzed and the result is given out and discussed using Nash bargaining model and sealed offer bargaining strategy method under different information condition. The conclusion is that the bargaining mechanism is equitable to some extent and can realize global economic optimizing and local economic optimizing. And what's more, it can decrease the demand of the quality of the firms' information, so to decrease the government's transaction costs and management difficulty.Another important allocation method of initial emission permits is auction. Based on the homogeneous multi-unit characteristic of emission permits, multi-round first-price sealed-bid auction model is established. Under the condition of introducing the budget-constraint, applying the individual private value model, the bidders' Bayesian-Nash equilibrium bid strategy is given out and is compared with that of no budget-constraint. The conclusion is that when applying the individual private value model, the existence of budget-constraint does not influence the order of the bidders' bids of unit price, but it will decrease the value of the bids regularly and decrease the vender's income.The dynamic consistency problem of the policy to allocate the initial emission permits is analyzed in the paper. The model of allocation of initial emission permits in proportion is established. The government makes the abatement proportion of emission in the model and the firms declare the actual emission quantities. Two kinds of emission controlling method are analyzed: to control the total quantity of emission permitted, or to control the total quantity of emission abated. The conclusion is: the former is of dynamic consistency. And it will conclude in the good cycle of the existence of the credit standing between government and firms. So the former is better than the latter.The mechanism of the extra emission motoring is the tool of ensuring the implement of TEPs. To prevent the firms from extra emission, the mechanism of motoring has to be established by government. The action and equilibrium strategies of the government and the firms are analyzed. And effluence of the public monitoring mechanism to the players is discussed. The conclusion includes that if the firms has reputation lost, the penalty can be substitute of the equilibrium check probability of to some extent when it is big enough.The case study of the allocation of emission permit among the control areas of the H...