Review and comparative analysis on auction mechanism for allowance allocation in carbon markets

doi:10.12006/j.issn.1673-1719.2019.017

Abstract

Abstract:

The auction mechanism plays an important role in carbon markets. In this paper, we review the auction mechanism in different carbon markets, including the EU, California, Australia and China’s pilot carbon markets, and we analyze the auction effect on these carbon markets. The auction practice of international carbon markets shows auction mechanism can benefit carbon markets by better operations and liquidity. However, China’s pilot carbon markets are still under development and improvement and the auction mechanism is at experimental stage. We propose some suggestions to China’s national carbon market from the auction factor design, the auction platform construction and the auction fund management. These research conclusions and recommendations are expected to provide valuable reference for the design of auction mechanism in China’s national carbon market.

Key words: International carbon markets, Emission allowance, Auction allocation

Wen-Xiu ZHANG,Mao-Zhi DENG,Jian ZHOU. Review and comparative analysis on auction mechanism for allowance allocation in carbon markets[J]. Climate Change Research, 2019, 15(3): 246-256.

Figures/Tables 9

Table 1 The application of auction mechanism in carbon markets

Table 2 The auction mechanism in EU ETS

Table 3 The auction in the second stage of EU ETS

Fig. 1 The auction in EU ETS during 2013-2017②(②http://www.eex.com/en/market-data/environmental-markets/auction-market/european-emission-allowances-auction#!/2010/01/05。)

Table 4 The auction mechanism in CAT ETS

Fig. 2 The auction in the third stage (2012-2017) of CAT ETS④(④https://www.arb.ca.gov/cc/capandtrade/auction/auction_archive.htm。)

Table 5 The auction mechanism in AU ETS

Table 6 The auction mechanism in China’s carbon trading pilots

Table 7 Comparison of auction mechanisms in international carbon markets and China’s carbon pilots

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