Allocating inter-provincial CEA in China based on the utility perspective --a method for improving the variable weight function

Abstract

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Introduction:At different times, China has pursued different carbon emission reduction targets, so it is crucial to develop a reasonable and flexible allocation scheme for Chinese carbon emissions quotas, referred to as Chinese Emission Allowance (CEA), in order to achieve carbon reduction goals. As important responsible entities for carbon reduction, each province needs to rely on a well-designed CEA allocation scheme to help achieve their emission reduction goals.Methods:Therefore, based on the utility perspective, this paper constructs allocation principles and methods to formulate the inter-provincial CEA allocation scheme for China in 2030. Specifically, the entropy method, SBM model, improved variable weight function, and ARIMA time series model are sequentially adopted to simulate the re-allocation scheme, examine its rationality, and develop CEA allocation schemes under different principles.Results and Discussion:The following conclusions are drawn: 1) The allocation scheme formulated based on historical emission simulation methods, industry benchmark methods, and other current CEA allocation methods has certain irrationality, and future CEA allocation should not follow the original methods; 2) The improved variable weight function is better suited for allocation in CEA than the current original allocation method. The allocation scheme developed under this method, which balances fairness and efficiency principles, is more appropriate for the actual reduction of carbon emissions in China.

Keywords

• CEA
• utility
• variable weight function
• improving allocation methods
• allocation principles