Open AccessENERGY‐USE CHOICES AND ALLOWANCE TRADING UNDER THE PERSONAL CARBON TRADING SCHEME
Author(s) -
FAN JIN,
WANG SHANYONG,
WU YANRUI,
LI JUN,
ZHAO DINGTAO
Publication year - 2015
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/nrm.12054
Subject(s) - allowance (engineering) , emissions trading , economics , microeconomics , database transaction , energy (signal processing) , total energy , carbon price , environmental economics , greenhouse gas , natural resource economics , operations management , computer science , mathematics , ecology , statistics , biology , programming language , psychology , displacement (psychology) , psychotherapist
Abstract Carbon emissions caused by the household sector have become a major contributor to total emissions. Personal carbon trading (PCT), although untested in practice, could potentially be a powerful tool to induce change in consumer behavior. In this paper, we present an optimization model to determine the energy use choices and allowance trading, and a market equilibrium model to obtain the total supply and demand functions of allowances and then to derive the equilibrium allowance price. It is shown that the level of allocated allowance, energy price, emission rate, and transaction costs could influence the equilibrium allowance price and traded volume. Furthermore, the allowance price is affected negatively and slightly by changes in energy prices, so the total energy price variations will be lessened relatively in the PCT scheme. To further demonstrate these relationships, numerical simulations are conducted. On the basis of the simulation results, the implications of this study are discussed and suggestions for future study are provided.