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Abatement technology investment and emissions trading system: a case of coal-fired power industry of Shenzhen, China

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Abstract

As one of China’s emissions trading system (ETS) pilots, Shenzhen established the first carbon market of China in 2013. With field data collection and benefit-cost analysis, this article assesses the abatement technology investment decisions of Shenzhen coal-fired power industry under different carbon price scenarios. The results indicate that Shenzhen ETS constitutes a main driver for the short-term technology investment of the industry, but the long-term stimulation effect appears quite limited, except for the integrated gasification combined cycle technology under high carbon price scenario. Further, the paper proposes the short-term and long-term optimal investment strategy for the industry, and relevant policy suggestions.

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Fig. 1

Notes

  1. According to “The Interim Measures for the Administration of CO2 Emissions Trading of Shenzhen Municipality,” if the emissions of an enterprise exceed the limit, it will be fined 3 times of the market value of the exceeded emissions. In addition, the emissions limit of the enterprise for the next year will be cut down by the exceeded amount. There may also be some other informal punishments such as covered by official media. So, the punishment is considerably severe that we assume any rational agent will not break the cap.

  2. http://www.cerx.cn/Portal/home.seam.

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Acknowledgments

We would like to thank the anonymous reviewers and the editors for their insightful and helpful comments for the substantial improvement of the paper.

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Authors and Affiliations

  1. Key Laboratory for Urban Habitat Environmental Science and Technology, School of Environment and Energy, Peking University Shenzhen Graduate School, Shenzhen, China

    Ying Huang & Xiaoming Ma

  2. College of Environmental Sciences and Engineering, Peking University, Beijing, China

    Ying Huang & Xiaoming Ma

  3. School of Public Administration, Sichuan University, Chengdu, Sichuan, China

    Lei Liu

  4. Robert Schuman Centre for Advanced Studies, European University Institute, Florence, Italy

    Lei Liu

  5. Shenzhen Environmental Monitoring Center, Shenzhen, China

    Xiaofeng Pan

Authors
  1. Ying Huang
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  2. Lei Liu
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  3. Xiaoming Ma
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  4. Xiaofeng Pan
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Correspondence to Lei Liu.

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Huang, Y., Liu, L., Ma, X. et al. Abatement technology investment and emissions trading system: a case of coal-fired power industry of Shenzhen, China. Clean Techn Environ Policy 17, 811–817 (2015). https://doi.org/10.1007/s10098-014-0854-0

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