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The five major power generation corporations dominate the power industry in China, and play vital roles in China's carbon trading scheme. Under this circumstance, this paper studies the allocation of carbon emission quotas to China's five major power generation corporations based on the fairness and efficiency principles, which proves the primary prerequisite for setting up the national carbon market. Specifically, a bi-level programming model is developed to optimally allocate carbon emission quotas to the corporations, and then a zero sum gains data envelopment analysis (ZSG-DEA) model is adopted to evaluate the efficiency of the allocation so as to adjust towards the optimal solution. The results indicate that power generation has significantly positive influence on the allocation of carbon emission quotas. Moreover, the difference between the sum of optimal carbon emissions and the sum of carbon quotas allocated is 1.431 billion tons, which implies that the emission reduction potential of the five major power generation corporations is tremendous. Finally, the bi-level model in this paper can well capture the context of China's power industry and provide effective results for the allocation of carbon quotas. [ABSTRACT FROM AUTHOR]

The increasing energy and material consumption associated with global economic growth has resulted in the need for more severe efforts at mitigating global climate change. The iron and steel industry consumes 8% of energy and emits 7% of total CO 2 globally. China's iron and steel industry contributes to 15% of that country's total CO 2 emissions. Therefore, there is an urgent need to explore the possibility of net zero emissions in the iron and steel industry in China to meet China's goal of carbon neutrality before 2060. In the study presented in this paper, the MESSAGEix–China iron and steel model was developed by integrating the process-based technology of the sector into the IIASA's MESSAGEix framework to explore zero CO 2 emission pathways and their associated impacts on resources, energy, and water in China's iron and steel industry up to 2100. We found that there are multiple pathways to achieving zero CO 2 emissions in the Chinese iron and steel industry by the end of the 21st century. More specifically, in all the pathways developed in this study, CO 2 emissions decreased significantly between 2030 and 2060 due to the rapid application of 100% scrap-based Electric Arc Furnaces (EAFs) and hydrogen-based Direct Reduced Iron (DRI)-EAFs steel-making technologies. However, by 2060, there will still be 70–360 Mt of CO 2 emissions from China's iron and steel industry; consequently, carbon sink or negative emission technologies are required to offset this and achieve the country's carbon neutrality goal. Furthermore, technologies for achieving zero emissions differ widely in terms of their impacts on the consumption of materials and energy. Compared to the electric (ELE) scenarios, 25–40% of extra iron ore is consumed in the current and new national policy (NPS) scenarios and the DRI scenarios, but 25–220% of scrap is required. At the same time, 20–150% more energy will be saved in the ELE scenarios than in the NPS and DRI scenarios. Finally, we recommend that policy makers design a cross-cutting strategy to achieve zero CO 2 emissions and enhance efforts for material recycling and the provision of clean energy and water. • There are multiple pathways to achieving net zero emissions in China's iron and steel industry. • Steel outputs are essential for reducing CO 2 emissions and conserving materials, energy, and water. • Hydrogen-based DRI and 100% scrap-EAFs technologies are key to achieving zero emissions. • CO 2 mitigation measures have limited impacts on water consumption. [ABSTRACT FROM AUTHOR]