Impact And Precaution Mechanism Of Market Power On Emissions Trading Under The Heterogeneous Product Market

Increasingly obvious industry segments trends,export-oriented economic development characteristics and other factors largely determine the absence of significant products competition within the regional emissions trading system.The existing theory and evidence show that,market power also exist in emissions trading system,which leads to distortion of market mechanism and damages the effectiveness and effect of the system.Therefore,under the national conditions of market economic system remains to be perfected,it is urgent to pay full attention in order to achieve the transition to the new environmental management system of emissions trading.Therefore,providing that the existence of interactive influence between the product market and emissions trading market under the heterogeneous product market.Using the nonlinear programming,game theory and other methods,the socially optimal allocation condition is analyzed.Based on analyzing optimal decision of fringe firm under specific permit price,Strategic behavior of dominant firm and its impact on the system equilibrium is studied.And then the precautionary measures of market power are to be explored from the perspective of emission allocation and corrective taxation based on the socially optimal allocation condition equilibrium.Moreover,a qualitative analysis is used to verify the analysis of the analysis conclusions.Firstly,the existing market power problem on the trading emissions system is analyzed.Manipulation evidence has been in-depth excavation of the dominant firm using market power.The main conclusions are as follows: the marginal revenue and the marginal cost of unit pollution reduction should be consistent with the price of permit under the optimal allocation condition.In order to obtain the extra profit,the dominant firm would choose two price manipulation strategies: ‘Premium-pricing' strategy in the case of a net permit seller,while it chooses ‘Under-pricing' strategy in acting as a net buyer.It inevitably intrudes system equilibrium deviations from socially optimal configuration state so that the fringe firm suffers more losses.The initial endowment of permit appears to be a significant factor in dominant firm's optimal decision making.Secondly,On the basis of deeply analyzing the influence of market power on the system equilibrium,this research try to start from the perspective of the emission allocation to achieve the advance control of market power.The results shows that under the existing initial allocation mechanism,the problem of market power may exist in the 1th distribution cycle,The government promotes regulate the initial endowment quantity of the dominant firm and fringe firm in the 2nd distribution cycle,promote the redistribution of the emission reduction tasks,and the rational decision of the dominant firm in the 1th distribution cycle is not to choose price manipulation,Then the optimum efficiency of the system comes true.Finally,considering the market power have a diverse and complex influence on the system equilibrium.As well as the widespread existence of emission permit's complexity,market uncertainty and asymmetric information,and other factors make initial allocation mechanism face many difficulties,especially in the initial distribution of the emission right after the market dominance of the prevention of the problem is particularly weak.Therefore,the prevention of market dominance from the pre-control into the control is particularly important.Taking into account the permit trade tax as a tool of government regulation also has a distorting effect to the emissions trading system.Try to integrate it into the firm's production,abatement,trading and other parts in-depth discussion the precaution mechanism of market power.The results showed that meticulously designed corrective tax mechanism cans effectively precaution the price manipulation of dominant firm,which will become a powerful tool for market power.Generally speaking,this research has theoretical significance and applicable value to reveal and explain the problem of market power on the trading emissions system.And provide a theoretical basis for the relevant policy decision-making,Also it will be the effective prevention mechanisms propose offer emission permit mechanism reasonable selection and creation,reducing the blindness and uncertainty of the implementation,to ensure the sustainability and acceptance of its implementation to provide a reference.