Carbon Trading: A Deep Dive into its Regional Impacts

Understanding the Global Greenhouse Gas Crisis

The world faces a pressing challenge: escalating greenhouse gas emissions. Addressing this crisis demands the development of a scientifically sound carbon accounting framework.

Carbon trading mechanisms, such as Emissions Trading Schemes (ETS), have emerged as potential solutions. These schemes aim to incentivize businesses to reduce their carbon emissions by creating a market for carbon credits.

Guangdong Province's ETS: A Case Study

Assessing the Impacts of Carbon Trading

This study evaluates the impacts of Guangdong Province's ETS policy on air pollutant emission reduction. The study constructed a multi-regional input-output MRIO model to assess the impact of embodied carbon transfer under inter-provincial trade.

The findings indicate that from 2021 to 2030, Guangdong Province is projected to achieve a carbon emission reduction of 2736 to 3046 million tCO2eq, with a total trading volume of 1582 to 1763 million tCO2eq.

Key Findings

• Embodied carbon transfer due to inter-provincial trade has a significant impact on Guangdong Province's carbon emissions.
• The ETS policy is effective in incentivizing carbon emission reduction in key industries, such as power generation, manufacturing, and transportation.
• The ETS policy has positive co-benefits for air pollutant emission reduction, particularly for sulfur dioxide and nitrogen oxides.

Conclusion

This study provides valuable insights into the regional impacts of carbon trading and highlights the importance of considering embodied carbon transfer in carbon accounting.

The findings underscore the need for robust carbon accounting frameworks and the potential of ETS policies in mitigating greenhouse gas emissions and improving air quality.