A Study of the Allocation of Carbon Emission Permits among the Provinces of China Based on Fairness and Efficiency

Carbon emissions trading systems are implemented to limit the total quantity of carbon emitted. Such trading systems are the main policy tool used by countries worldwide to address climate change. The initial allocation of carbon emission permits is the starting point of a carbon emissions trading system, and it represents the core of such a system. The provinces of China differ in terms of their population, stage of development, economic level, energy structure and industrial structure. Thus, performing the initial allocation of carbon emission permits among the provinces is a key difficulty. This paper focuses on the initial allocation of carbon emission permits among the provinces of China from the perspective of fairness and constructs a model of the initial inter-provincial allocation of carbon emission permits. In addition, a data envelopment analysis (DEA) model including undesirable outputs is used to optimize the resulting fair distribution from the perspective of efficiency.