A dynamic and continuous allowances allocation methodology for the prevention of carbon leakage: Emission control coefficients

Sun, Y., Xue, J., Shi, X., Wang, K., Qi, S., Wang, L. & Wang, C., 15-Feb-2019, In : Applied Energy. 236, p. 220-230 11 p.

Research output: Contribution to journalArticleAcademicpeer-review

  • YongPing Sun
  • JinJun Xue
  • XunPeng Shi
  • KeYing Wang
  • ShaoZhou Qi
  • Lei Wang
  • Cheng Wang

Carbon leakage has become the core issue of emission trading systems. Using data from Hubei Province, this paper identifies the drawbacks of the prevailing methods for preventing carbon leakage and proposes a new methodology to overcome them, namely, Emission Control Coefficients. In contrast to the common tiered structure method, the Emission Control Coefficients generate a dynamic and continuous emission control coefficient for each industry which will improve the effectiveness and fairness of allowance allocation, set aside sufficient time for the low carbon transformation of industries, and balance the needs to protect competitiveness and decarbonize and are particularly suitable for the emission trading systems of developing counties. This paper makes three main academic contributions: Firstly, it proposes a new indicator, the abatement potential for more effective determining allowance allocation than the prevailing method. Secondly, it better distinguishes industrial differences. Thirdly, it can better respond to the problem of excess allowances that is due to technological advances and trade pattern changes.

Original languageEnglish
Pages (from-to)220-230
Number of pages11
JournalApplied Energy
Publication statusPublished - 15-Feb-2019
Externally publishedYes


  • Emissions trading system, Competitiveness, Carbon leakage, Allowance allocations, Developing countries, GENERAL EQUILIBRIUM, INDUSTRIAL SECTORS, EUROPEAN-UNION, TRADING MARKET, CLIMATE POLICY, EU, CHINA, ETS, ADJUSTMENTS, CAPACITY

ID: 117806547