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Sustainability 2017, 9(2), 322; doi:10.3390/su9020322

How to Set the Allowance Benchmarking for Cement Industry in China’s Carbon Market: Marginal Analysis and the Case of the Hubei Emission Trading Pilot

1
,
2,3,* and 4,5
1
College of Environmental Science and Forestry, State University of New York, Syracuse, NY 13210, USA
2
Institute for International Studies, CICTSMR, Wuhan University, Wuhan 430072, China
3
Research Center for Climate Chang and Energy Economic (CCEE), Wuhan University, Wuhan 430072, China
4
Research Center for Contemporary Management, Tsinghua University, Beijing 100084, China
5
State Grid Energy Research Institute, Beijing 102209, China
*
Author to whom correspondence should be addressed.
Academic Editors: Liexun Yang, Peng Zhou and Ning Zhang
Received: 24 January 2017 / Revised: 16 February 2017 / Accepted: 17 February 2017 / Published: 22 February 2017
View Full-Text   |   Download PDF [1451 KB, uploaded 22 February 2017]   |  

Abstract

Greenhouse gas (GHG) benchmarking for allocation serves as rewards for early actions in mitigating GHG emissions by using more advanced technologies. China Hubei launched the carbon emission trading pilot in 2014, with the cement industry represented as a major contributor to the GHG emissions in Hubei. This article is set to establish a general benchmarking framework by describing and calculating the marginal abatement cost curve (MACC) and marginal revenue and then comparing the different GHG benchmarking approaches for the cement industry in the Hubei Emission Trading Pilot (Hubei ETS) case. Based on the comparison of three GHG benchmarking approaches, the Waxman-Markey standard, the European Union Emission Trading Scheme (EU ETS) cement benchmarking, and the benchmarking approach applied in California Cap-and-Trade program, it is found that; (1) the Waxman-Markey benchmark is too loose to apply in Hubei as it provides little incentive for companies to mitigate; (2) the EU ETS benchmark approach fits the current cement industry in Hubei ETS; and (3) the GHG benchmarking standard in the California Cap-and-Trade Program is the most stringent standard and drives the direction of the future development for Hubei ETS. View Full-Text
Keywords: GHG; Cap-and-Trade program; benchmarking; cement industry; Hubei ETS GHG; Cap-and-Trade program; benchmarking; cement industry; Hubei ETS
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Dai, F.; Xiong, L.; Ma, D. How to Set the Allowance Benchmarking for Cement Industry in China’s Carbon Market: Marginal Analysis and the Case of the Hubei Emission Trading Pilot. Sustainability 2017, 9, 322.

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