The Guangdong Emissions Trading Scheme

  • Yuejun Luo
  • Xueyan Li
  • Wenjun Wang
  • Daiqing Zhao
Keywords: Guangdong Emissions

Abstract

A pilot carbon emissions trading scheme (ETS) has been launched for three years in the Guangdong (GD) Province in China, with the power industry contributing nearly 66% of the covered CO2 emissions. This article reviews the policy design of the power sector in the GD ETS, and finds that the percentage of paid allowance is the primary factor reflected in the carbon cost for generators with an average efficiency. The ways the GD ETS influences the costs and profits of power plants are our primary focus.

The impacts of carbon cost on the overall cost of 300 MW, 600 MW and 1,000 MW plants are analyzed. The results indicate that the ratio of carbon cost to total cost is about 0.5% for the power plants in the GD ETS. This small percentage has little influence on plant operations. The impacts of the carbon cost on the cash flow of the three sizes of plants are assessed by their internal rates of return. A critical curve is developed and shows the benefit scope for the plants at a specific paid allowance and carbon price. This can be used by governments to improve policy design and by the enterprises to manage their carbon assets.

Author Biographies

Yuejun Luo

Yuejun Luo, CEM, corresponding author, received his master of science degree from Nanjing Normal University. He is senior research assistant with the Department of Energy Strategy Research, Guangzhou Institute of Energy Conversion, Chinese Academy of Sciences. His interests include carbon emission trading system design and assessment, and energy management. Email: luoyj@ms.giec.ac.cn.

Xueyan Li

Xueyan Li, corresponding author, received her master of science degree from Beijing Normal University and obtained a Ph.D. from the University of Hong Kong. She is a senior researcher with the Central China Normal University school of sociology. Her interests include social policy assessment and evaluation Email: lixueyan@mail.ccnu.edu.cn.

Wenjun Wang

Wenjun Wang, received a master of economics degree in Chongqing University and obtained her Ph.D. from the Chinese Academy of Social Sciences. She is a senior researcher with the department of energy strategy research, Guangzhou Institute of Energy Conversion, Chinese Academy of Sciences. Her interests include low-carbon economy policy, carbon tax, and carbon emission trading system assessment. Email: wangwj@ ms.giec.ac.cn.

Daiqing Zhao

Daiqing Zhao, received her Ph.D. degree from Tohoku University. She is the chief of the Department of Energy Strategy Research, Guangzhou Institute of Energy Conversion, Chinese Academy of Sciences. She is on the advisory committee on environmental protection of the Standing Committee of the twelfth people’s Congress of Guangdong Province, and a member of the Guangdong provincial advisory committee on policymaking. Her interests include low-carbon development policy and energy strategy. Email: zhaodq@ms.giec.ac.cn.

References

International Energy Agency (2012). World energy outlook.

Arzbaecher, C. and Parmenter, K. (2014). Carbon policy impact on industrial facilities.

Strategic Planning for Energy and the Environment, 34(1), pages 11–39.

National Development and Reform Commission (2011, October 29). Notice on

the work of piloting carbon emissions trading. http://www.ndrc.gov.cn/zcfb/

zcfbtz/2011tz/t20120113_456506.htm.

Duan, M., Pang, T. and Zhang, X. (2014). Review of carbon emissions trading pilots in

China. Energy and Environment, 25(3-4), pages 527-550.

Qi, S., Wang, B. and Zhang, J. (2014). Policy design of the Hubei ETS pilot in China.

Energy Policy, 75, pages 31–38.

Wu, L., Qian, H. and Li (2014). Advancing the experiment to reality: perspectives on

Shanghai pilot carbon emissions trading scheme. Energy Policy, 75, pages 22–30.

Jiang, J., Ye, B. and Ma, X. (2014). The construction of Shenzhen’s carbon emissions

trading scheme. Energy Policy, 75, pages 17–21.

Hart, C. and Zhong, M. (2014). China’s regional carbon trading experiments and the

development of a national market: lessons from China’s SO2 trading program. Energy

and Environment, 25(3-4), pages 577–592.

Wang, P., Dai, H., Ren, S., Zhao, D. and Masui, T. (2015) Achieving Copenhagen target

through carbon emissions trading: economic impacts assessment in Guangdong Province

of China. Energy, 79, pages 212–227.

People’s Government of Guangdong Province (2012, August 20). Inform on issuing

the scheme of greenhouse gas emissions control for Guangdong Province during the

th Five-Year Plan. http://zwgk.gd.gov.cn/006939748/201208/t20120828_341198.

html.

Guangdong Provincial Development and Reform Commission (2013, November 25).

Notice of the first allowance allocation plan in Guangdong ETS. http://www.gddpc.

gov.cn/xxgk/tztg/201311/t20131126_230325.htm.

Cong, R. and Y. Wei (2010). Potential impact of carbon emissions trading (CET) on

China’s power sector: a perspective from different allowance allocation options. Energy,

, pages 3,921–3,931.

Zhao, X., Yin, H. and Zhao, Y. (2015). Impact of environmental regulations on the

efficiency and CO2 emissions of power plants in China. Applied Energy, 149, pages

–247.

Teng, F., Wang, X. and Zhiqiang, L. (2014). Introducing the emissions trading system

to China’s electricity sector: challenges and opportunities. Energy Policy, 75, pages

–45.

Guangdong Provincial Development and Reform Commission (2014, August

. Notice of the allowance allocation plan in Guangdong ETS in 2014.

http://210.76.72.13:9000/pub/gdsfgw2014/zwgk/zcfg/gfxwj/201503/

t20150309_305043.html.

Guangdong Provincial Development and Reform Commission (2015, July 10). Notice

of the allowance allocation plan in Guangdong ETS in 2015.http://210.76.72.13:9000/

pub/gdsfgw2014/zwgk/tzgg/zxtz/201507/t20150713_322106.html.

Liu, L., Zong, H., Zhao, E., Chen, C. and Wang, J. (2014). Can China realize its carbon

emissions reduction goal in 2020 from the perspective of thermal power development.

Applied Energy, 124, pages 199–212.

Electric Power Planning and Engineering Institute (2014). Reference cost index on the

limitation design of thermal power engineering. China electric power press.

Guangdong Province Development and Reform Commission (2014, September

. Notice of lowering feed-in tariff of the power generation enterprises.

http://210.76.72.13:9000/pub/gdsfgw2014/zwgk/tzgg/jggg/201502/

t20150216_304054.html.

National Development and Reform Commission (2011, March). Provincial greenhouse

gas inventory compilation guidelines (try out).

Regional Greenhouse Gas Initiative. Market monitor reports. http://www.rggi.org/

market/market_monitor, accessed 5 July 2017

Published
2019-03-01
Section
Articles