Study On Pricing Model Of Initial Emission Permits

Emission trading is the efficient market allocation means of environmentalcapacity resources, which not only can help the implementation of the total amountcontrol policy, but also effectively reduce the social cost of pollution treatment. At thesame time, it is a necessary complement to the existing macroscopic policies.Moreover, the work reports of central government from2009and2012have putforward to relevant requirements of “carrying out the work of emissions trading pilot”.Therefore, the compensated use of emission permits and emissions trading is quiteessential. Pricing of initial emissions trading is the basic work and key link of thesystem of the compensated use of emission permits and emissions trading. No matterwhether the price is too high or too low, it will largely influence the effectiveness ofthe system, as well as the active degree of emission trading in the secondary market.Therefore, how to correctly formulate the price of initial emission permits is crucial.The study content is about the pricing of emission permits. On the basis ofcomprehensive analysis of initial emission permits pricing methods from domesticand foreign researchers, the paper chooses the basic theory of the shadow pricemethod as a guide to build the pricing model of initial emission permits through theestablishment of mathematical programming. The model’s theoretical basis lies in thescarcity, value, quasi-public goods nature as well as externality of the environmentalresources. And it involves the profits of products, the cost of treating the pollutantsand the pollution discharge fee. Through the introduction of the proportion of theamount of pollutant emission and product output, pollutants removal rate andLagrange multiplier parameters, it uses Lagrange multiplier method to solve themodel. This paper expands the model on the basis of the presence of differences of thefour pollutants including chemical oxygen demand, ammonia nitrogen, sulfur dioxideand nitrogen oxides in the aspects of both the cost of the treatment of pollutants andsewage charges. Finally according to the pollutant emission load and the shadow priceof the pollutants’ initial emission permits, a weighted average could be calculated which is regarded as the initial emission permits price of the pollutants in someindustry. The paper selects sulfur dioxide of the thermal power industry as an exampleto calculate the price of the initial emission permits. The study has shown that theprice of initial emission permits of sulfur dioxide in thermal power industry is2210.84yuan/ton. And in the regions where system of compensated use of emissionpermits has been implemented, the lowest price of initial emission permits of sulfurdioxide is500yuan/ton, and the highest one is5,000yuan/ton. So the result of themodel calculation can be seen more in line with the actual situation. In addition, theprice of initial emission permits from the model can provide guidance forcorresponding pollution treatment strategies for the enterprises. Namely, when theprice is higher than the enterprise’s cost of pollutant treatment, the enterprise willupgrade the processing equipment or use other means to raise the level of treatmentand actively treat pollution emissions. Therefore, this model can provide a certainreference for pricing of initial emission permits.