Allocation Model of Carbon Emission Permits for the Electric Power Industry with a Combination Subjective and Objective Weighting Approach

Abstract

The electric power industry plays a vital role in carbon emissions reduction efforts. The initial allocation of carbon emission permits to the electric power industry is the key to ensuring the effective operation of the carbon trading market. In this study, the multiple correlated factors that affect the carbon emission permit allocation system were extracted. Then, based on the experts’ knowledge and experience, the subjective weight of each index was determined using an improved analytic hierarchy process. Subsequently, the indices were mapped using an improved entropy weight method, and the objective weight of each index was adaptively determined. Finally, the comprehensive weight of each index was determined by optimizing the combination of its subjective and objective weights, and an allocation model of carbon emission permits for the electric power industry was established. A case study of a province by comparative simulation was performed. The simulation results showed that compared with conventional allocation schemes that consider single factors, the theoretical estimates obtained using the proposed model more objectively reflected the actual situation of carbon emissions reduction permits and responsibilities in the region.

Keywords

• carbon emission permits
• allocation model
• electric power industry
• analytic hierarchy process
• entropy weight method