Abstract:

From the relevant mechanism of quota allocation in the carbon trading market, we can see that China currently mainly uses the benchmark method to allocate quotas. How to set the benchmark value of the industry is the key problem in adopting this method. However, there is only limited research on the problem of setting benchmark value, which mainly focuses on the analysis of single industry. With the increasing number of carbon emissions control industries in China, setting the benchmark of each industry separately will ignore the impact of cost changes in different industries on the whole industry economy. Therefore, this paper proposes to set the benchmark under the research framework of “whole-industry+single-industry”, which compensates for the neglect of the economic impact of the present single industry benchmark and maintains the advantages of the present single industry benchmark. The results show that the price changes in the basic industries have a great impact on the whole industry, so that it is usually necessary to set higher benchmark values for these industries.

Key words: Industry benchmarks, Carbon emissions trading, Extended I-O price model, Non-linear programming