Carbon emission abatement quota allocation in Chinese manufacturing industries: An integrated cooperative game data envelopment analysis approach

Feng Li, Ali Emrouznejad*, Guo liang Yang, Yongjun Li

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

The Chinese government announced to cut its carbon emissions intensity by 60%–65% from its 2005 level. To realize the national abatement commitment, a rational allocation into its subunits (i.e. industries, provinces) is eagerly needed. Centralized allocation models can maximize the overall interests, but might cause implementation difficulty and fierce resistance from individual subunits. Based on this observation, this article will address the carbon emission abatement quota allocation problem from decentralized perspective, taking the competitive and cooperative relationships simultaneously into account. To this end, this article develops an integrated cooperative game data envelopment analysis (DEA) approach. We first investigate the relative efficiency evaluation by taking flexible carbon emission abatement allocation plans into account, and then define a super-additive characteristic function for developing a cooperative game among units. To calculate the nucleolus-based allocation plan, a practical computation procedure is developed based on the constraint generation mechanism. Further, we present a two-layer way to allocate the CO2 abatement quota into different sub-industries and further different provinces in Chinese manufacturing industries. The empirical results show that five sub-industries (Processing of petroleum, coking and processing of nuclear fuel; Smelting and pressing of ferrous metals; Manufacture of non-metallic mineral products; Manufacture of raw chemical materials and chemical product; Smelting and pressing of non-ferrous metals) and two provinces (Guangdong and Shandong) will be allocated more than 10% of the total national carbon emission abatement quota.

Original languageEnglish
Pages (from-to)1259-1288
Number of pages30
JournalJournal of the Operational Research Society
Volume71
Issue number8
Early online date5 Jul 2019
DOIs
Publication statusPublished - 2 Aug 2020

Keywords

  • carbon emission allocation
  • Chinese manufacturing industries
  • cooperative game
  • Data envelopment analysis
  • nucleolus

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