The Strategy And Application Of Emission Permit Trading In Control Of Green House Gas Emission

Global climate change which was induced by emissions of greenhouse gas hasbeen the focus of the world. Global climate change and greenhouse gas reduction are bothenvironmental issues and economic issues. As one of Kyoto mecllanisms, emissiontrading has been advanced as one of the primary economic tools for internationalco-operation to reduce emissions of greenhouse gas. This paper discusses the advantagesof emission trading as a cost-effective way and the importance of allocating elnissionpermit by giving a clear picture of emission trading. A global trading analysis of energyand environment model (GTAP-E) is used to simulate three basic situations (no emissiontrading, annex 1 emission trading, worldwide emission trading) and the simulated price isgiven to analyze the impact to Cllina. We find that annex 1 emission trading whichAmerica attends is the lnost beneficial situation for China. In that case, for the purpose offulfill reduction responsibility, advanced countries will build more reduction projects andgive technology support through Clean Development Mechanism (CDM) in China. It willnot only stimulate our economy, but also help us adjust energy structure and acceleratereforms of technology. We also find that the worst case is worldwide emission trading. Inthat case we can not derive benefit whether we attend trading or not. Moreover, whileadvanced countries finish their responsibilities, if we put the obligation on our shoulder inthe pressure of international society, we will receive great loss. For avoiding possibledisadvantage, this paper gives some policy advice and the outlook for future reductions ofgreenhouse gas in China.