New carbon emissions allowance allocation method based on equilibrium strategy for carbon emission mitigation in the coal-fired power industry

Abstract

The carbon emissions from coal-fired power have become an increasing concern to governments around the world. In this paper, a carbon emissions allowances allocation based on the equilibrium strategy is proposed to mitigate coal-fired power generation carbon emissions, in which the authority is the lead decision maker and the coal-fired power plants are the follower decision makers, and an interactive solution approach is designed to achieve equilibrium. A real-world case study is then given to demonstrate the practicality and efficiency of this methodology. Sensitivity analyses under different constraint violation risk levels are also conducted to give authorities some insights into equilibrium strategies for different stakeholders and to identify the necessary tradeoffs between economic development and carbon emissions mitigation. It was found that the proposed method was able to mitigate coal-fired power generation carbon emissions significantly and encourage coal-fired power plants to improve their emissions performance.