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This study investigates the carbon compensation mechanism as a tool to promote coordinated economic and environmental development in China's Jing-Jin-Ji region (Beijing, Tianjin, and Hebei). A novel approach for calculating carbon compensation cost that integrate emission responsibility as well as carbon abatement cost through a bi-level programming model is proposed. Shared producer and consumer responsibility is established for carbon emissions under the multi-regional input-output model. Marginal abatement costs of Beijing, Tianjin, and Hebei are further calculated through the input-output and linear programming method. Results highlight that the emission responsibility allocation method significantly affects the inter-regional carbon compensation amount. The production-based approach leads to a 77% reduction of carbon compensation amount from Beijing to Hebei, and a 170% overestimation from Tianjin to Hebei compared with the shared responsibility approach in 2060. The optimal carbon compensation unit cost ranges from 1539 to 6438 yuan/ton when the carbon reduction ratio ranges from 10% to 20%. Beijing would compensate Hebei 3.56 and 29.74 billion yuan for achieving 10% and 20% emission reduction, respectively. Similarly, Tianjin's compensation for Hebei would be 0.23 and 1.87 billion yuan in the two scenarios. Results further show that implementing the proposed carbon compensation mechanism can reduce total abatement cost by 43% and 84% in Jing-Jin-Ji under the two scenarios. The methods and results of this paper could help inform future carbon compensation implementation in China and other countries. • Develop a bi-level programming model to determine optimal carbon compensation cost. • Consider emission responsibility and carbon abatement cost in Jing-Jin-Ji. • Resulting mechanism reduces abatement cost by 43% for 10% emission reduction. • Production-based allocation underestimates carbon compensation amount by 62%. • Optimal carbon compensation unit cost changes with marginal abatement cost. [ABSTRACT FROM AUTHOR]

As the climate is warming up and climate disasters occur more frequently, China's carbon peak and carbon neutrality targets are gaining attention, with provinces starting to set carbon peak targets and constantly exploring low carbon economic development opportunities. However, the existing evaluation index system mainly focuses on low carbon cities and green cities, and there is no evaluation index system for carbon peak and carbon neutrality. This study adopts a combination of theoretical and empirical research and draws on domestic and international research results to construct the first index system for evaluating China's provincial carbon peak and carbon neutrality. The evaluation index system includes 18 indicators from three dimensions: climate ambition, low carbon status, and emissions trends. Using this index system, we calculated the carbon peak and carbon neutrality indices of 30 Chinese provinces. Further, the 30 provinces were classified into six categories, and corresponding policy recommendations for achieving the "Dual carbon" targets were put forward. The evaluation index system constructed in this paper can provide a reference for future carbon peak and carbon neutrality assessments. By disclosing the integrated index of each province, we hope to effectively curb the increasing local carbon emissions; avert inaction in areas with good natural endowments; and motivate the advancement of the latter, to boost the implementation of the "Dual carbon" targets coherently for the whole country. [Display omitted] • An integrated evaluation system on China's Provincial "Dual carbon" was proposed. • 30 provinces in mainland China were ranked based on the integrated index. • 6 groups were classified to show provincial differences on dual carbon performance. • Policy recommendations to fulfill China's climate commitment were put forward. [ABSTRACT FROM AUTHOR]

Greenhouse gases (mainly carbon dioxide) is one of the important factors contributing to extreme weather we face today. The carbon cap-and trade and carbon offset are common but important carbon emission reduction policies in many countries. Further, carbon emissions generated by corporate activities can be effectively reduced through specific capital investment in green technology. However, such kind of capital investment is rather costly and is unlikely for a single company to solely invest in it. Moreover, most decision-making situations in business are correlated instead of independent. Therefore, this paper explores potential competitive and cooperative issues of the sustainable product-inventory models with collaborative investment in carbon emission reduction technology under carbon cap-and trade and carbon offset polies. A Stackelberg approach of game theory is utilized for determining the optimal equilibrium solution between the buyer and the vendor under different carbon emission reductions. Realistic data examples are used to demonstrate the solution and sensitivity analysis on the main variables. The results indicate that proportions of investment by the vendor and buyer in carbon emission reduction technology play a critical role in both parties' shipping, ordering strategies and profits. This role becomes more prominent as the proportion of investment increases. In addition, an increased proportion of investment in carbon emission reduction technology involves increased investment and thus contributes to the fulfillment of the carbon reduction goal. Finally, a comparison between the carbon cap-and-trade and carbon offset policies reveals that, although increases in the carbon trading price and carbon offset price are both conducive to carbon emissions inhibition, they exert different effects on the total profits of the vendor and buyer. [ABSTRACT FROM AUTHOR]

Existing literature on the optimal type of carbon mitigation policy and whether it is better to apply a policy mix instead of a single policy is still unclear. This paper assesses the policy effectiveness under exogenous shocks by applying a dynamic stochastic general equilibrium (DSGE) model. Comparing the differences between the carbon mitigation and economic impacts of a policy mix versus a single policy (carbon tax or carbon trading scheme), the results showed that energy demand is rigid in response to technological shocks. Therefore, there is no significant difference for the energy consumption related carbon emissions in response to the technological progress under three different policy scenarios: a carbon tax (scenario I), a carbon trading scheme (scenario II), and a carbon policy mix (scenario III). Overall, carbon emissions policy has a negative impact on the economy, compared to the other two policies, a carbon trading scheme has a relatively slight impact on the economy. A mandatory carbon price would have a more significant impact than would a market-based carbon price. The policy mix formed by a carbon tax and a carbon trading is comprehensive in terms of both price flexibility and coverage scope. [ABSTRACT FROM AUTHOR]

As an economic means to cope with climate change, carbon trading has become an important measure to reduce carbon emissions in China. It has been over seven years since the initiation of seven pilot carbon markets, but has the implementation achieved the goal of controlling carbon emissions in the region? Are the effects really resulted from the carbon market other than other energy-saving and emission reduction policies? Based on the provincial panel data of China from 2005 to 2016 this paper conducts an empirical study on the emission reduction effects of pilot projects using the Difference-in-differences model (DID). The results show that: (1) The implementation of carbon markets in Beijing, Shanghai and Hubei exhibited a significant inhibitory effect on local carbon emissions, but a promoting effect in Guangdong, and no significant effect was found in Tianjin; (2) In terms of time lag effect, no significant inhibiting effect on the local carbon emissions is found during the first year of opening of Shanghai carbon market but the effect grew significantly from 2015 to 2016; while for Hubei and Beijing, significant effect was shown from the first year of running. Being an experimental program to see whether the carbon trading policy would work in China or not and if it does, under what conditions and settings the policy becomes effective, the 7 pilot markets provide important experiences and lessons to the upcoming nationwide market in China. Based on the empirical result that the carbon trading system in Beijing, Shanghai and Hubei effectively reduced carbon emissions, it is suggested that the national carbon market should actively learn from the experiences of these three pilot markets particularly. [ABSTRACT FROM AUTHOR]