Search Results (37)

Against the background of carbon neutrality, the impact of carbon quota allocation mechanism on supply chain’s decision-making of emission reduction has received increasing attention. This study analyzes the optimal decision-making behavior of manufacturing supply chains under three mechanisms: completely free, complete auction and hybrid. Meanwhile, the abatement cost-sharing contract is introduced and the backward induction method is applied to solve the optimal equilibrium solution under each mechanism. Combined with numerical simulation, this study further investigates the impacts of market demand and cost-sharing coefficient changes on the system profit. The result shows that the abatement cost-sharing contract can significantly improve the level of manufacturers’ abatement and the total profit of the supply chain. Among the mechanisms analyzed, the hybrid mechanism realizes the balance between efficiency and incentives and demonstrates stronger adaptability and policy flexibility. Full article

China’s energy system is transitioning from a state of coal-dependent, low-electrification to a low-carbon, high-electrification paradigm. Carbon emissions have become a central constraint that directly influences generation expansion and transmission investment decisions. This study develops a bottom-up optimization framework integrating dynamic carbon trajectories into a coupled generation–transmission–storage expansion model. Distinct carbon emission trajectories are established on the basis of Guangdong’s allocated carbon budget, and the analysis evaluates the resulting power system structures and transition pathways under each scenario. Results show that Guangdong’s clean energy transition relies on external power imports, nuclear power, and variable renewable energy (VRE), collectively accounting for 87% of generation by 2060. Flexibility requirements expand substantially, with storage capacity rising from 10% of installed VRE in 2030 to 26% in 2060. Critically, under identical cumulative carbon budgets, an accelerated decarbonization pathway achieving earlier peak emissions demonstrates a pivotal economic trade-off: it imposes modestly higher near-term operation costs but delivers significant long-term savings by avoiding prohibitively expensive end-of-period abatement measures. Specifically, advancing the emissions peak from 2030 to 2025 reduces cumulative system costs over the planning horizon by CNY 53.7 billion and lowers the 2060 levelized cost of electricity by 5.2%. Full article

Reducing emissions through the invisible hand of the market has become an important way to promote sustainable environmental development. The shadow price of carbon dioxide ($C{O}_2$) is the core element of the carbon market, and its accuracy depends on the micro level of the measurement data. In view of this, this paper innovatively uses enterprise level input-output data and combines the stochastic frontier method to obtain $C{O}_2$ shadow prices in China’s industrial sector. On this basis, the impacts of research and development (R&D) intensity, opening up level, traffic development level, population density, industrial structure, urbanization level, human resources level, degree of education, and environmental governance intensity on shadow price are discussed. In further analysis, this study introduces a Spatial Durbin Model (SDM) to evaluate the spatial spillover effects of $C{O}_2$ shadow price itself and its influencing factors. The research results indicate that market-oriented emission abatement measures across industries and regions can reduce total costs, and it is necessary to consider incorporating carbon tax into low-carbon policies to compensate for the shortcomings of the carbon Emission Trading Scheme (ETS). In addition, neighboring regions should coordinate emission abatement tasks in a unified manner to realize a sustainable reduction in $C{O}_2$ emissions. Full article

Background: Carbon pricing in the form of fuel taxes is an important tool for abating climate change. This study examines the impact and pass-through of fuel taxes in the truckload freight market. Methods: State-level truckload market data, integrated with retail diesel prices, are analyzed using fixed-effects regression modeling. Results: Taxes and fuel costs are not only passed on by diesel retailers to motor carriers; the results reveal the overshifting of diesel taxes from motor carriers to shippers. Conclusions: The findings are consistent with inelastic short-term demand for long-haul carriage, indicating that relatively large price increases will be necessary to reduce diesel consumption in the trucking industry. Full article

Considering consumers’ low-carbon preferences, this article analyzes a manufacturer’s price and carbon abatement strategies, as well as a retailer’s price and promotion strategies, in a centralized game, where the manufacturer and the retailer jointly make decisions, and a decentralized game, where the two parties each make decisions simultaneously. This study discusses the impact of the carbon abatement cost coefficient, promotion cost coefficient, sensitivity coefficient of consumer demand to carbon abatement rate or promotion rate, or carbon tax rate on the manufacturer’s carbon abatement rate, commodity’s retail price, and retailer’s promotion rate. This article also discusses the impact of any one of the main parameters on supply chain profit. Through comparisons of the above two games, this article concludes that the former is better than the latter for firms, consumers, and the environment. This article also concludes that a reduction in the carbon abatement cost coefficient, a rise in the sensitivity coefficient of consumer demand to the carbon abatement rate, or a rise in the carbon tax rate increases the manufacturer’s optimal carbon abatement rate. A relatively high carbon abatement rate means relatively low CO₂ emissions, which are environmentally friendly and conducive to sustainable development at the ecological level. The foregoing conclusions provide governments with references for making carbon tax policies and also offer firms references for making decisions. Full article

This paper presents a mathematical approach to analyzing carbon abatement costs and the allocation of carbon emission allowances in China’s industrial sectors. We utilize input–output data from 30 Chinese provinces between 2009 and 2018 to estimate carbon abatement costs by applying the slack-based measure (SBM) efficiency model and its dual form. The SBM model captures inefficiencies and offers a rigorous framework for measuring abatement costs. Using these costs, we develop a centralized allocation data envelopment analysis (DEA) model, which maximizes sectoral benefits through optimal reallocation. This DEA model is formalized as a linear programming problem, with the aim of determining the efficient allocations of carbon allowances while maintaining the system’s economic productivity. Furthermore, we construct intertemporal, interregional, and spatiotemporal allocation DEA models to examine the dynamics of carbon emission allowance allocation over time, space, and combined spatiotemporal dimensions. These models offer insights into the efficiency of carbon markets under varying conditions. Our proposed new mathematical formulations reveal optimal allocation strategies that can balance emission reductions with industrial productivity. This study also provides novel mathematical frameworks for analyzing the carbon allowance distribution and contributions to both the theory and application of mathematical optimization in environmental policy design. Our findings reveal that China’s industrial carbon abatement costs exhibit significant interprovincial and regional differences. Developed provinces with higher levels of industrial development have higher carbon abatement costs, while provinces with less-developed industrial sectors have lower costs. Under the interregional allocation scenario of carbon emission allowances that consider abatement costs, developed provinces have smaller industrial carbon emission reductions, whereas less-developed provinces have larger reductions. In the intertemporal allocation scenario, provinces with larger industrial economies face greater emission reduction tasks. Under the combined interregional and intertemporal allocation scenario, industrial sectors in coastal developed provinces have lower carbon emission reductions, while those in inland less-developed provinces have higher reductions, mirroring the spatial allocation results of carbon emission allowances. Full article

Along with the new stage of prevention and control of the COVID-19 pandemic and the vision and goals of combatting climate change, the challenges of the transition to a green economy have become more severe. The need for green recovery of the economy, stability and security of energy production and consumption, and the coordination of low-carbon transformation and socio-economic development has become increasingly urgent. This paper proposes a new theoretical framework to study the effect of carbon emission reduction on the mutual application of the carbon market, fiscal policy and monetary policy under the non-homothetic preference of energy product consumption. By constructing an environmental dynamic stochastic general equilibrium (E-DSGE) model with residents’ non-homothetic preferences, this paper finds that coordinating the carbon market and macroeconomic policies can achieve economic and environmental goals. However, the transmission paths for each are different. The carbon market influences producers’ abatement efforts and costs through carbon prices. Monetary policy controls carbon emissions by adjusting interest rates, while fiscal policy controls carbon emissions by adjusting total social demand. Improving non-homothetic preferences will amplify business cycle fluctuations caused by exogenous shocks, thus assuming the role of a “financial accelerator”. Further research shows that non-homothetic preferences influence the heterogeneity of different policy mixes. Finally, this paper discovers that the welfare effects, the relative size and difference of long-term and short-term effects resulting from the different policy mixes, also depend on the level of non-homothetic preferences. The intertemporal substitution mechanism due to the improvement of non-homothetic preferences endows low-carbon production with “option” characteristics. Our study reveals the role of non-homothetic preferences on the effectiveness of policy implementation. It highlights the importance of matching monetary and fiscal policies with the carbon market based on the consumption and production side. It provides ideas for policy practice to achieve the goal of “dual carbon” and promoting coordinated socio-economic development. Full article

The forestry carbon offset policy has been implemented for a short time, and in order to study its optimization mechanism and pressure-sharing emission reduction effect, this paper applies the directional distance function to calculate the marginal abatement cost of each province/city based on the panel data of 30 provinces/cities in China from 2000 to 2020. Then, we utilize the synthetic control method to analyze the forestry carbon offset policy by taking Beijing, Guangdong, and Fujian as a natural experiment. Finally, placebo tests and differences-in-differences tests were used to verify the experiment’s effectiveness. The study has the following results. (1) The forestry carbon offset policy is a Pareto improvement after integrating multiple benefits. The proportion of FCS offset should be increased, and government subsidies should be reduced when carbon quotas are tightened, followed by the gradual inclusion of more industries and enterprises in the scope of mandatory emission reductions. (2) The impact of forestry carbon offset policy on sharing the abatement pressure has regional heterogeneity, which is affected mainly by geographical location, economic level, and industrial structure. It can be obtained that the forestry carbon offset policy has shared the pressure for emission reductions in Guangdong and Fujian. This study provides a theoretical basis for promoting forestry carbon offset policies and their coupling with other carbon-reduction policies. Full article

The forthcoming implementation of national policies towards hydrogen blending into the natural gas grid will affect the technical and economic parameters that must be taken into account in the design of building heating systems. This study evaluates the implications of using hydrogen-enriched natural gas (H₂NG) blends in condensing boilers and Gas Adsorption Heat Pumps (GAHPs) in a residential building in Rome, Italy. The analysis considers several parameters, including non-renewable primary energy consumption, CO₂ emissions, Levelized Cost of Heat (LCOH), and Carbon Abatement Cost (CAC). The results show that a 30% hydrogen blend achieves a primary energy consumption reduction of 12.05% and 11.19% in boilers and GAHPs, respectively. The presence of hydrogen in the mixture exerts a more pronounced influence on the reduction in fossil primary energy and CO₂ emissions in condensing boilers, as it enhances combustion efficiency. The GAHP system turns out to be more cost-effective due to its higher efficiency. At current hydrogen costs, the LCOH of both technologies increases as the volume fraction of hydrogen increases. The forthcoming cost reduction in hydrogen will reduce the LCOH and the decarbonization cost for both technologies. At low hydrogen prices, the CAC for boilers is lower than for GAHPs; therefore, replacing boilers with other gas technologies rather than electric heat pumps increases the risk of creating stranded assets. In conclusion, blending hydrogen into the gas grid can be a useful policy to reduce emissions from the overall natural gas consumption during the process of end-use electrification, while stimulating the development of a hydrogen economy. Full article

Regional carbon budgeting in policymaking is underutilized despite its importance for achieving global climate goals, particularly the Paris Agreement’s target of limiting global warming to 2 °C by 2050. In this work, we present the model PLEDGES, a novel system dynamic-based simulation tool that focuses on the European Union region to equitably distribute carbon budgets among the Member States and activate emissions offset strategies to manage unexpected deviations from the EU27 carbon budget. The emissions trading dynamic is based on the “Gains from Trade” approach. The tool also calculates the cost of the offset strategies based on the use of the abatement cost curves for the Member States. Using a case study of the recent increase in carbon emissions in Germany in response to reduced Russian gas supplies, different emissions scenarios for Germany’s quota redistribution among the Member States are explored. The study reveals varied cost implications of between 30–60 Eur/ton CO_2eq to offset the emissions increase across other Member States. Final recommendations include promoting cross-border collaboration at the EU27 level. Full article

Within the context of global initiatives to address climate change, the shipping industry is facing increasingly intensified pressure to decarbonize. The industry is engaging in the exploration and implementation of greenhouse gas (GHG) emission reduction measures, including energy efficiency technologies and alternative fuels, with the objective of accelerating the progression towards greenhouse gas mitigation. The application of various GHG emission reduction measures usually requires different levels of investment costs, and economic feasibility is a key factor influencing policy formulation and investment decisions. In this regard, this paper developed a cost-effective model for energy efficiency measures and alternative fuels based on the marginal abatement cost (MAC) methodology. This model can distinguish the differences between energy efficiency measures and alternative fuels in terms of Tank-to-Wake emissions and Well-to-Wake emissions in the GHG emission evaluation system. By taking typical ship types with significant emission contributions as study cases, i.e., bulk carriers (61–63K DWT), container ships (8000 TEU), product tankers (115K DWT), crude oil tankers (315–320K DWT), and Ro-Ro passenger ferries (3500 DWT), the GHG abatement cost-effective performance of major categories of measures such as operational measures, technical measures, renewable energy sources, and alternative fuels were calculated. According to the MAC results, the marginal abatement cost curves were plotted based on the ranking of energy efficiency measures and alternative fuels, respectively. The impacts of bunker fuel prices and carbon market prices on the cost-effectiveness were analyzed. The research results provided the GHG abatement potential of the integrated application of cost-effective energy efficiency measures, the cost-effectiveness ranking of alternative fuels, and the carbon emission price expected to bridge the price gap between alternative fuels and conventional bunker fuel. The presented methodology and conclusions can be used to assist shipping companies in selecting emission reduction measures, and to support maritime authorities in developing market-based measures. Full article

Pricing decisions for construction and demolition waste recycling are severely hampered by consumer uncertainty in assessing the value of recycled building materials. This paper uses a construction and demolition waste (CDW) recycling utilization model that consists of a building materials manufacturer and a building materials remanufacturer and compares both the prices and the profits under different carbon tax scenarios, i.e., consumer risk-averse and risk-neutral scenarios. The main conclusions are as follows. (1) The optimal price of traditional products is always negatively correlated with consumer risk aversion. Unlike traditional products, the optimal price of recycled building materials is negatively related to the degree of consumer risk aversion in the case of a low carbon tax; the opposite conclusion is obtained in the case of a high carbon tax. (2) When the abatement cost coefficient is below the threshold and the carbon tax is low, the profits of the building materials manufacturer and remanufacturer show a U-shaped trend with consumer risk aversion; in the case of a high carbon tax, the profits of the two enterprises are positively correlated with consumer risk aversion. In addition, when the abatement cost coefficient is above the threshold, there is an interval in which the profits of the building materials manufacturer are positively correlated with consumer risk aversion in the case in which the carbon tax satisfies this interval. In all the other cases, there is a U-shaped trend in profits and consumer risk aversion levels for both the building materials manufacturer and the remanufacturer. Full article

Thailand has formulated its climate change policy and updated the relevant plans and policies to align with the goal of achieving carbon neutrality and net-zero greenhouse gas (GHG) emissions. This study investigated the optimal level of GHG mitigation in Thailand by taking into account the marginal abatement cost (MAC) and social cost of carbon (SCC). The research also evaluated how energy efficiency and renewable energy technologies could influence GHG reduction in the power and industrial sectors and illustrate policy recommendations that could be aligned with the 2020–2050 policy and plan period. The findings indicated that there could be instances where GHG mitigation potential would be insufficient to reach the national milestone. In such cases, it would become imperative to leverage all technologies within the marginal abatement cost curve (MACC) and also utilize the SCC for policy decision-making and meeting the desired goals. In certain scenarios, the adoption of additional technologies or measures would be necessary, such as flexible power generation and deploying carbon capture and storage or hydrogen, which are high-cost technologies. Furthermore, preparations should be made for multiple levels of climate change policies and plans beyond 2030. Full article

As the largest carbon emitter in China’s manufacturing sector, the low-carbon transition of the steel industry is urgent. CO₂ capture, utilization, and storage (CCUS) technology is one of the effective measures to reduce carbon emissions in steel industry. In this paper, a comprehensive assessment model of source–sink matching-levelized cost in China’s steel industry is constructed to evaluate the potential, economy, and spatial distribution of CCUS retrofits of blast furnaces in the BF-BOF steel industry. The results show that, if no extra incentive policy is included, the levelized cost of carbon dioxide (LCOCD) of 111 steel plants with a 420.07 Mt/a CO₂ abatement potential ranges from −134.87 to 142.95 USD/t. The levelized cost of crude steel (LCOS) range of steel plants after the CCUS retrofits of blast furnaces is 341.81 to 541.41 USD/t. The incentives such as carbon market and government subsidies will all contribute to the early deployment of CCUS projects. The CCUS technology could be prioritized for deployment in North China, Northwest China, and East China’s Shandong Province, but more powerful incentives are still needed for current large-scale deployment. The research results can provide references for the early deployment and policy formulation of CCUS in China’s steel industry. Full article

Carbon abatement in the power sector is essential to achieving the “double carbon” goal, and blockchain technology, one of the most promising emerging technologies, will assist the power sector in efficiently achieving this goal. In terms of the effectiveness of carbon abatement, comparative studies on coordination mechanisms are absent in the existing literature. On this basis, aiming at the cooperative abatement strategy between power generation generators and sellers under the carbon tax policy, this paper has developed four decision models: the Stackelberg game led by power generation enterprises, the simultaneous Nash bargaining decision by both parties, the vertical integration decision by supply chain enterprises, and the cooperative carbon emission reduction game by supply chain enterprises, to analyze the changes in electricity price, sustainability level, power sales, and profits of supply chain members. The results of the numerical analysis show that user preference for blockchain technology and an increase in the proportion of low-carbon electricity information uploaded to the blockchain can significantly improve the sustainability level of the electricity supply chain. The level of investment in green technologies by electricity producers under cooperative abatement decision-making increases compared to the electricity producer-dominated Stackelberg game model. The sustainability level of the electricity supply chain is higher under the Nash simultaneous decision than under the abatement cost-sharing decision, but the decision-maker’s profit is lower. The values of overall profit and sustainability level of the electricity supply chain are both highest under the vertically integrated decision. Full article