Forecasting the Allocation Ratio of Carbon Emission Allowance Currency for 2020 and 2030 in China

Abstract

Many countries and scholars have used various strategies to improve and optimizethe allocation ratios for carbon emission allowances. This issue is more urgent for China dueto the uneven development across the country. This paper proposes a new method that divideslow-carbon economy development processes into two separate periods: from 2020 to 2029 andfrom 2030 to 2050. These two periods have unique requirements and emissions reduction potential;therefore, they must involve different allocation methods, so that reduction behaviors do not stallthe development of regional low-carbon economies. During the first period, a more deterministiceconomic development approach for the carbon emission allowance allocation ratio should be used. During the second period, more adaptive and optimized policy guidance should be employed. We developed a low-carbon economy index evaluation system using the entropy weight method tomeasure information filtering levels. We conducted vector autoregressive correlation tests, consulted60 experts for the fuzzy analytic hierarchy process, and we conducted max-min standardized dataprocessing tests. This article presents first-and second-period carbon emission allowance models incombination with a low-carbon economy index evaluation system. Finally, we forecast reasonablecarbon emission allowance allocation ratios for China for the periods starting in 2020 and 2030. A goodallocation ratio for the carbon emission allowance can help boost China's economic development andhelp the country reach its energy conservation and emissions reduction goals.