Methods of initial allocation of carbon emission rights

Methods of initial allocation of carbon emission rights

  • Posted by admin
  • April 14, 2022

Academician Ding Zhongli, vice president of the Chinese Academy of Sciences, believes that the historical emissions, per capita emissions and differences in economic development stages of each country must be considered when allocating global carbon emissions. In the “Ninth Five-Year Plan” and “Tenth Five-Year Plan” scientific and technological research reports, Tsinghua University proposed the equal distribution principle of per capita cumulative emissions and the “two convergence” distribution method considering historical responsibility. For the first time, India proposed the “Compression and Convergence Scheme”. “Compression” refers to a gradual reduction in the global total current emissions, and “convergence” refers to each country’s current emissions rights determined by its current actual emissions levels. The per capita emission level of high-carbon emission countries gradually decreases, while the per capita emission level of low-carbon emission countries gradually increases, and finally reaches the same level. In 1997, Brazil proposed the “Historical Responsibility Plan”, which better reflected the “polluter pays” principle. The Urban Development and Environment Research Center of the Chinese Academy of Social Sciences proposed a “carbon budget plan”, emphasizing that the initial allocation of carbon emission rights should first ensure people’s basic needs and curb extravagance and waste. The Netherlands National Institute for Public Health and the Environment proposed a progressive participatory approach and a multi-stage approach. The gradual participation method believes that developing countries can not undertake emission reduction obligations at a relatively low level of economic development, and will participate in international emission reductions when their economic development reaches a certain level;

The multi-stage approach requires developing countries to undertake obligations in four stages: baseline emission scenario stage, carbon emission intensity reduction stage, stable emission stage and emission reduction stage.

In addition, there are emission account schemes, including the national emission account scheme and the per capita emission account scheme, the national emission account scheme takes into account the historical responsibilities of countries, and the per capita emission account takes into account interpersonal equity; Chen Wenying (1998) proposed a mixed allocation mechanism for carbon rights, taking into account interpersonal fairness and economic benefits; Wang Zhongwei (2002) proposed the fair principle and benefit choice for the initial allocation of carbon emission rights; Pan Jiahua and Zheng Yan (2009) quantified each country’s GHG emission reduction responsibilities from the perspectives of international fairness and interpersonal fairness, and pointed out that the allocation of international emission reduction responsibilities should comprehensively consider each country’s historical responsibility, actual development stage and future development needs; in addition, there are Tiptych method, multi-sector convergence method, binary intensity target method, SD-PAMS method and sustainable method. Various initial allocation methods have their own advantages and disadvantages, and are used by different interest groups from the perspective of different interest groups. Based on the experience of various scholars and countries, the initial allocation method of carbon emission rights is summarized as follows:

(1) Greenhouse Gas Emissions Development Rights Law

The Greenhouse Gas Emissions Development Right Law, also known as GDRs, was jointly developed by Bear and others from the Stockholm Research Institute in Sweden. The emission reduction capacity and responsibility of each country are measured by per capita GDP and per capita cumulative carbon emissions. The product of two indicators is used to construct an emission allocation model. The core idea is that the emission reduction obligations and carbon emission rights of each country should be consistent with each country’s emission reduction responsibility and emission reduction capacity. The GDRs approach has three basic principles: right to development, capacity and responsibility.

The right to development has a development weight, and countries below this value can take national development as a priority factor and do not need to bear the responsibility for emission reduction; capability is measured by the income level of each country. In order to calculate the capability of each country, the sum of individual income above the development threshold of each country is added up and added to the calculation; responsibility is based on the polluter pays principle. It is assumed that emissions are proportional to consumption, and consumption is proportional to income. It is believed that carbon emissions below the development threshold income are used to meet the needs of survival, and this carbon emissions must be given, while carbon emissions higher than the development threshold income are extravagant emissions and should bear more responsibility for emission reduction.

(2) Global Convergence Law

The Global Convergence Approach, also known as C&C, believes that the per capita carbon emissions of developed countries should gradually decrease to the world per capita carbon emissions level, while the per capita carbon emissions of developing countries should gradually increase to the world per capita carbon emissions level. On this basis, Hohne et al. (2006) proposed a common but differentiated convergence method, which determined a point in time when each country reached the same per capita carbon emissions, and believes that per capita emissions in developed countries will converge to an equal level for all countries by 2050, while the convergence of developing countries begins to decrease when per capita emissions reach a certain percentage of the global average, and countries that do not exceed this ratio are not responsible for reducing emissions.

(3) Allocation scheme based on emission reduction costs

In order to minimize the cost of emission reduction, the carbon emission allocation model should make the marginal cost of each region or country equal to the carbon value (such as carbon market price, emission right price, etc.). That is to say, the allocation of carbon emission rights or carbon emission reduction has been optimized, and the carbon emission resources have achieved the Pareto optimal allocation. In the allocation scheme based on the cost of emission reduction proposed by Babiker, the cost of carbon emission reduction is directly linked to GDP.

(4) Three-sector Law

This approach divides a country’s economy into three broad sectors: light industry, energy-intensive or export-oriented, and electricity production. Construct a GHG emission function for each sector to calculate the sector’s nominal GHG emissions over the commitment period. Adding up the quotas for the three sectors, taking into account economic growth, demographic change, and energy use, yields GHG emission quotas for each sector in a country.

(5) Examples of foreign carbon dioxide total allocation plans Adam rose and others believe that the US carbon dioxide total allocation should take into account the territorial principle, per capita principle, economic activity capacity and ability to pay. Among them, the territorial principle includes three sub-principles: the principle based on emission rights, the principle based on regional gross domestic product and the principle based on energy efficiency.

Germany has adopted a benchmarking approach to domestic allocation of emission allowances by setting industry benchmarks. The emission share of industrial equipment is allocated based on the historical carbon dioxide emissions in the base period, and the emission share of energy conversion and transformation equipment is also allocated based on the historical carbon dioxide emissions in the base period. Emission allowances for new equipment are allocated on the basis of product emissions.