Research On Carbon Emissionsquota Trading Performance Simulation In China’s Power Industry

Various social and economic problems caused by the excess carbon dioxide emission have gotthe attention of all human beings. In2011, our country had emitted almost29%of the total globalcarbon emission, and became the world’s largest emitter of carbon dioxide. Due to the limitation ofthe nation’s energy structure, China’s power industry is dependent on traditional fossil energy. At theend of "11th five-year plan", the carbon emission of China’s power industry has accounted for50%ofthe whole nation, which indicates great emission reduction potential. Under market mechanism, CO2emission reduction quota could be traded freely between regions as a commodity, which not only canbring obvious market economic benefits, also is advantageous to the long-term target determinationand adjustment of industrial structure.Under China’s power industry’s “twelfth five-year plan” carbon emission reduction target, thisresearch firstly gives a brief introduction of China’s power industry and analyzes the differencebetween each province’s carbon emission; and then, using the clustering method, we divided thewhole30provinces’ power industries into five regions. Secondly, we estimated the carbon dioxidemarginal abatement cost curve of those five regions’ power industry using engineering economics andregression analysis. And then, the energy conservation target of the power industry from2010till2015in these five regions is assigned to each region based on7different criteria. Finally, a nonlinearprogramming model for performance evaluation of carbon emission reduction quota trading betweenthe regional power industries in China is built. The trading performance simulation results show that:(1) under different carbon emission reduction allocation criteria, the trading system can reduce theoverall conservation cost, in which the economic and social criteria bring out the most significant costsaving;(2) under different carbon emission reduction target allocation criteria, one area gets differentcost savings after trading;(3) with the perspective of fair, we should choose the initial allocationcriteria under CO2emissions.