scholarly journals Is South Korea’s Emission Trading Scheme Effective? An Analysis Based on the Marginal Abatement Cost of Coal-Fueled Power Plants

2019 ◽  
Vol 11 (9) ◽  
pp. 2504 ◽  
Author(s):  
Choi ◽  
Qi
Keyword(s):  
Power Plants ◽  
Stochastic Frontier Analysis ◽  
Carbon Tax ◽  
Supply And Demand ◽  
Market Price ◽  
Emission Trading ◽  
Green Economy ◽  
Resource Saving ◽  
Frontier Analysis ◽  
Trading Scheme

This paper examines not only the effectiveness of the South Korean emissions-trading scheme (ETS), but also the determinants of its performance. We apply a directional distance function and stochastic frontier analysis method to estimate environmental efficiency and the marginal CO2 abatement costs for 50 coal-fueled power plants from 2008 to 2016. The result indicates that the efficiency differs between the Lee Myung-bak and Park Geun-hye administration periods, with performance in the former period being relatively more effective than in the latter. Meanwhile, there were price gaps of 57.98% and 72.76% in 2015 and 2016, respectively, between the realized carbon market price and our result, indicating significant suppressed pressure on the market. We conclude that the Korean government should strengthen its regulations to more effectively implement a green economy. Policymakers could impose a carbon tax; substantially decrease the carbon emissions-free quota; and provide more incentives, especially to the energy-intensive, resource-saving coal-fueled power plants. This would ultimately keep market prices within a reasonable range and achieve a balance between the supply and demand for carbon emission allowances in the market.

scholarly journals A Study of the Feasibility of International ETS Cooperation between Shanghai and Korea from Environmental Efficiency and CO2 Marginal Abatement Cost Perspectives

2019 ◽  
Vol 11 (16) ◽  
pp. 4468 ◽  
Author(s):  
Chao Qi ◽  
Yongrok Choi
Keyword(s):  
Power Plants ◽  
Stochastic Frontier Analysis ◽  
Market Price ◽  
Abatement Cost ◽  
Environmental Efficiency ◽  
Marginal Abatement Cost ◽  
Cross Sectional ◽  
Frontier Analysis ◽  
The Impact ◽  
Feed In Tariff

With the worldwide spread of emissions trading schemes (ETSs) and the need for international cooperation on climate change, there is growing interest in linking ETSs. Along with sustainable development, preventing and controlling pollution, is now regarded as an urgent priority by China and Korea. In the context of the willingness of the Chinese and Korean governments to cooperate on ETS, this paper examines the feasibility of a pilot ETS cooperation between Shanghai and Korea from environmental efficiency and CO2 marginal abatement cost (MAC) perspectives. We apply a directional distance function (DDF) and stochastic frontier analysis (SFA) to estimate the environmental efficiency and the CO2 MAC of coal-fueled power plants in Shanghai and Korea using cross-sectional data from 2015. The results indicate that the group frontier environmental efficiency of Shanghai and Korea reached a similarly high score. However, as to meta-frontier environmental efficiency, the coal-fueled power plants in Korea performed better than those in Shanghai. The CO2 MAC results indicate that, despite the small gap in efficiency performance, the CO2 MAC of coal-fueled power plants is much higher than that in Shanghai due to the big feed-in tariff difference. This is because the MAC not only relates to the environmental efficiency, but also to the feed-in tariff. A higher feed-in tariff leads to higher MAC. To tackle this serious problem, which has also been addressed in previous studies, we suggest that policymakers should focus on the huge CO2 MAC differences caused by feed-in tariff differences to avoid equity problems when building the structure of the Shanghai-Korea ETS cooperation. For instance, compared with power plants in Shanghai, policymakers should set a looser cap and a higher offset for Korean plants. To reduce the impact of feed-in tariff on carbon trading in the market, it would also be effective to arrange a higher quota or a lower carbon tax for coal-fueled power plants in Korea. In addition, policymakers should fill the gaps of 85.15% and 67.6% between the realistic market price and the MAC results of coal-fueled power plants in Shanghai and Korea, respectively, by introducing stricter regulations.

scholarly journals An overview of Natural Gas Use in Ships: Necessity and Engine Supply

2018 ◽  
Author(s):  
Justas Žaglinskis ◽  
Paulius Rapalis ◽  
Nadezda Lazareva
Keyword(s):  
Energy Efficiency ◽  
Natural Gas ◽  
Power Plants ◽  
Carbon Tax ◽  
Emission Trading ◽  
Management Plan ◽  
Engine Exhaust ◽  
Control And Prevention ◽  
Trading Scheme ◽  
Energy Efficiency Design Index

The article consists of analysis of existing and planned air pollution from ships control and prevention tools such Marpol 73/78 Annex VI, Energy Efficiency Design Index, Energy efficiency operational indicator, Ship energy efficiency management plan, Regulation on the Monitoring Reporting and Verification of shipping emissions, Carbon tax, Maritime emission trading scheme. Norms of these control and prevention tools are difficult to ensue using traditional marine fuels. Pollution rates getting tighter and alternatives have to be used, and some of them have long been known and are not widely used due to objective reasons. Such alternative is natural gas, and its use in ship power plants could reduce concentrations of nitrogen, sulphur, carbon compounds and other pollutants in engine exhaust gas up to acceptable level. The part of maritime sector choosing gas or dual-fuel engines due to tighter pollution rates, and the supply of these engines analyzed in last part of article.

Do environmental policy and innovation improve carbon productivity? Evidence from the Korean Emission Trading Scheme

2021 ◽  
pp. 0958305X2110645
Author(s):  
Jung Youn Mo
Keyword(s):  
Environmental Policy ◽  
Environmental Performance ◽  
Panel Data Analysis ◽  
Emission Trading ◽  
Emission Trading Scheme ◽  
Factors Affecting ◽  
Frontier Analysis ◽  
Trading Scheme ◽  
Carbon Productivity ◽  
D Investment

This study investigates the relationship among technology innovation, emission trading schemes, and carbon productivity based on data from firms participating in the Korean Emission Trading Scheme. First, the total factor carbon productivity based on stochastic frontier analysis is estimated by industry and it is confirmed that changes in carbon productivity vary by industry. Based on the estimated carbon productivity, panel data analysis is conducted to determine the effects of innovation and environmental policy on carbon productivity. The results show that R&D investment and environmental policy play an important role in promoting carbon productivity. In this study, the factors affecting carbon productivity are also analyzed by industry. Comparative analysis across industries confirms that factors affecting environmental performance vary by industry. Innovation does not significantly affect carbon productivity in assembling industries, but in the process industry, R&D investment plays an important role in increasing environmental performance.

The unpaid social cost of carbon

2018 ◽  
Vol 31 (2) ◽  
pp. 122-134 ◽  
Author(s):  
Martina Linnenluecke ◽  
Tom Smith ◽  
Robert E. Whaley
Keyword(s):  
Fossil Fuel ◽  
Social Cost ◽  
Carbon Tax ◽  
Emission Trading ◽  
Carbon Taxes ◽  
Social Cost Of Carbon ◽  
Content Type ◽  
Trading Scheme ◽  
Fossil Fuel Industry ◽  
Fuel Industry

Purpose This paper aims to examine the complex issue of the social cost of carbon. The authors review the existing literature and the strengths and deficiencies of existing approaches. They introduce a simple methodology that estimates the amount of “legal looting” in the fossil fuel industry as an alternative approach to calculate an unpaid social cost of carbon. The “looting amount” can be defined as society’s failure to charge fossil fuel firms for the damage that their activities cause represents an implied subsidy. Design/methodology/approach The methodology used in this paper combines decisions in the form of policymakers setting carbon taxes and rational investors investing in carbon emission markets. Findings The authors show that the unpaid social cost of carbon in the fossil fuel industry was US$12.7tn over 1995-2013, but may be as high as US$115.5tn. Originality/value Over the same period, the sum of industry profits, emission trading scheme carbon permit and carbon tax revenue totalled US$7tn, indicating the industry would not be viable if it was made to pay for damages to society.

scholarly journals Productivity Hot Spots and Cold Spots: Setting Geographic Priorities for Achieving Food Production Targets

2021 ◽  
Vol 5 ◽  
Author(s):  
Rusyan Jill Mamiit ◽  
John Yanagida ◽  
Tomoaki Miura
Keyword(s):  
Technical Efficiency ◽  
Food Production ◽  
Stochastic Frontier Analysis ◽  
Hot Spot ◽  
Supply And Demand ◽  
The Philippines ◽  
Rice Production ◽  
Hot Spot Analysis ◽  
Frontier Analysis ◽  
Spot Analysis

Rice is the most important staple food in the Philippines as it provides almost half of the calorie requirements of the population. The domestic supply of rice, however, is inadequate to meet local demand, making the Philippines one of the top five rice-importing countries in the world. To close the domestic supply-and-demand gap, agricultural planners and policymakers in the Philippines have been promoting interventions to increase farm-level productivity. In support of the government efforts to increase rice productivity, a stochastic frontier analysis combined with an optimized spatial hot spot analysis was conducted to determine the factors that may influence the increase in rice farm efficiency and also identify candidate areas for relevant geographic-specific rice production interventions. Results show that enhancing access to irrigation and farm inputs and increasing the producers' technical capacity can help address the local supply deficiency by potentially increasing yield per hectare to as high as 5.50 metric tons per hectare. The approach to potentially increase rice farm technical efficiency and productivity must consider the spatial nature of rice production as suggested by the findings from the optimized hot spot analysis. It is important that policy interventions consider areas with a high incidence of low levels of productivity and technical efficiency. These are the locations where agricultural planners and policymakers can make greater impacts on rice yields. Relevant policies and initiatives, therefore, should take into account the geographical location of farms to ensure the greatest contribution to attaining food production targets.

Determinants of firm-level energy productivity – Evidence from the Korean emission trading scheme

2021 ◽  
pp. 0958305X2110292
Author(s):  
Jung Youn Mo ◽  
Wooyoung Jeon
Keyword(s):  
Environmental Policy ◽  
Panel Data Analysis ◽  
Emission Trading ◽  
Innovation Activity ◽  
Level Energy ◽  
Emission Trading Scheme ◽  
Energy Productivity ◽  
Firm Level ◽  
Frontier Analysis ◽  
Trading Scheme

With increasing global pressure on transition to carbon neutrality, various technical and policy efforts such as emission trading scheme and carbon tax are being made to improve energy productivity. Yet, there are not many literatures that analyze determinants of firm-level energy productivity, which is an important issue as energy use in industry accounts for one fourth of global carbon emission. This study investigates factors affecting energy productivity such as technology innovation, environmental policy and energy price based on firm-level data from the Korean Emission Trading Scheme (KETS). The total factor energy productivity is estimated by industry based on stochastic frontier analysis (SFA) and panel data analysis is performed to identify determinants of firm-level energy productivity. The results show that energy productivity in Korea has been improved since 2016, and technical progress and environmental policy play an important role in promoting energy productivity. In addition, analysis identifying industry-specific characteristics is performed as their production process and energy consumptions structures vary. The result shows that innovation activity does not significantly affect energy productivity in process industries, but it does in the assembling and high technology industries. This paper implies that policy design reflecting industry-specific characteristics is important to improve energy efficiency more effectively.

THE EFFECTIVE BENCHMARK SELECTION MODEL AND SIMULATION IN THE POWER SECTOR OF CHINA’S ETS

2020 ◽  
Vol 11 (03) ◽  
pp. 2041006
Author(s):  
SHAOZHOU QI ◽  
ANQI HE ◽  
JIHONG ZHANG
Keyword(s):  
Power Generation ◽  
Supply And Demand ◽  
Emission Trading ◽  
Selection Model ◽  
Trading Market ◽  
Allocation Method ◽  
Model And Simulation ◽  
Allowance Allocation ◽  
Trading Scheme ◽  
Carbon Emission Trading

In 2019, the National Carbon Emission Trading Scheme (ETS) of China’s power generation industry was officially launched, and the free allocation and benchmark are the primary ways for allowance allocation in the first phase of the national ETS. The carbon allowance allocation method is the basis for the effective operation of the ETS. In order to evaluate China’s carbon allowance allocation method published by policy, we constructed a selection model of the effective benchmark and combined with three different scenarios such as no generation-right trading market, incomplete generation-right trading market and complete generation-right trading market to simulate the operation of the national ETS in China’s power generation industry. The study shows that: (1) according to the current benchmark value published by policy, the carbon allowance supply will exceed demand in all scenarios. (2) Regardless of the scenario, in order to balance the supply and demand of allowance in the ETS, the effective benchmark value should be adjusted to 35th–50th quantile of the carbon emissions per unit power generation.

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