Abstract

In order for firms to implement the Circular Economy, and close all material and energy cycles, connections are needed not only within but also between multiple Industrial Ecosystems. To enable such complex interconnections, the European Union is preparing legislation to enforce the use of digital product passports (DPPs). These are verifiable collections of data about products’ composition, environmental footprint and opportunities for preventing waste. The notion of the DPP relies heavily on a suitable digital infrastructure, and it opens the possibility of using the power of artificial intelligence (AI), to optimize circular production within and between Industrial Ecosystems. The benefits of DPPs will only be attained if their design, knowledge engineering, and implementation is well-orchestrated. The purpose of this paper is to develop a set of guiding principles for the orchestration of DPPs, based upon a trans-disciplinary analysis, that form a theoretical basis upon which future research can build.

Introduction

As part of its Green Deal, the European Commission proposes the introduction of digital product passports (DPPs) in the European Single Market as an enabler of circular business practices leading to efficient use of materials and CO2 emission reduction (European Commission, 2022). The proposed regulation will mean that products can only be sold or put into service in the European Union if a DPP is available, providing an accurate and verifiable set of information about the products’ environmental sustainability, intended to help consumers and businesses make informed purchasing choices. Additionally, DPPs are intended to facilitate repairs and recycling and improve transparency about products’ environmental impact during production and throughout their entire lifecycle. DPPs will also enable public authorities to assess products’ compliance with sustainable production and usage regulations, as they will include data to enable the tracking of any substances of concern throughout the products’ lifecycle (Berger, Schöggl, & Baumgartner, 2022).

Implementing DPPs in practice presents a complex challenge to firms in industrial ecosystems to maintain high-value and high-quality material and energy cycles (Korhonen, Honkasalo, & Seppälä, 2018) as their supply chains extend around the globe, covering multiple administrative areas (Hopkinson, Zils, Hawkins, & Roper, 2018). Additionally, in order to close all necessary energy and material cycles, connections are required not only within such ecosystems but also between ecosystems, as waste from one industrial process may become input for a previously unrelated industry (Liu, Ma, & Zhang, 2012).

Conclusions

5.1. Critical reflection on the function, relevance and boundary conditions of the guiding principles
The guiding principles developed through the integration of several discipline-specific expertise serve as a roadmap for industrial ecosystems and public bodies as they approach the implementation of DPP. The guiding principles favor outcomes at the system level, which is a key requirement for DPP to effectively drive the changes needed to address environmental concerns. While the current analysis attempts to consider multiple factors and dimensions relevant to DPPs, research in this area should continue and test whether the developed principles and orchestration framework are mutually exclusive and collectively exhaustive. The orchestration framework focuses strongly on the implementation of DPPs with emphasis on operational guidelines, adoption and use across and within IEs with the purpose of enabling the transition to the CE. Realizing CE outcomes as a main purpose of DPP is a view we adopted in this study, yet, DPP are a broader development which most likely will entail broader implications, including intended and unintended consequences.

The implementation of DPP can be further enhanced by learnings from implementing other standards, technologies, and certifications at the global level, such as ISO or EPR models. ISO certification schemes have been widely adopted in practice on a global level, but their implementation is firm-specific with a strong internal focus (e.g., internal engagement of management and employees) and does not explicitly consider external stakeholders. Yet, a key learning from implementing ISO 9001 and 14001 is that managers tend to focus too much on the auditing and certification processes and less on continuous improvement and internalization of learning (Boiral, 2011). With a strong focus on technology, the implementation of DPP should also consider the risk of overemphasizing the technology at the expense of the actual outcomes to be achieved through the technology. EPR models are an example of standards implemented beyond individual firms. The increasing interest in EPR models has shown that implementation on a wider scale, across national boundaries, requires harmonized legislation and the development of a coordinating framework that can enable the proper enforcement of recycling standards and the role of orchestrators such as Producer Responsibility Organizations (Kunz et al., 2018). Thereby, the orchestration framework proposed in this study as a linking glue for the guiding principles follows this narrative and emphasizes a multitude of relevant actors to be engaged and the emerging governance, regulatory, and implementation challenges.

Abstract

     It is important to unearth the role of structural change factors for sustainable growth in developed economies. Economic complexity, export product quality, and institutional indicators represent the overall structural change and transformation in an economy. This paper probed the influence of export product quality and economics of complexity on economic growth for 28 OECD (Organization for Economic Co-operation and Development) countries using the data from 1990 to 2019. In doing so, the study employs three-panel data econometric models to investigate the role of economic complexity, export quality, and institutional quality on economic development. The paper performs the empirical tests, including the cross-sectional related dependency methods and cointegration techniques. As per the results emerging from fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimation, export quality and financial development positively and significantly strongly impact growth in the long run. The empirical conclusions report detailed discussion on sustainable growth and discuss novel implications concerning product quality and institutional performance. The conclusions stress the practical implications for sustainable economic growth of OECD economies.

Introduction

     Over the last decade, there has been rising research in describing and analyzing countries’ productive structures. New measures of the economic complexity index have been developed to determine the sophisticating nature of the procedure of production making and gains from trade. According to Hidalgo and Hausmann (2009), the economic complexity helps to analyze countries’ productive capacities and the product quality of exports. Since they are more effective in estimating economic growth than traditional predictors, like GDP per capita, they are now widely used (Hausmann et al., 2014). Economic complexity occurs in a country if it can produce diversified products and export products have a more complex production structure. More specifically, economic complexity is the expanse of productive knowledge a country possesses that impacts economic performance. According to Lapatinas et al. (2019), it has been observed empirically that countries with higher complexity tend to gain additionally from trade and have a high degree of trade openness. Countries with advanced levels of economic-based complexity have higher economic capabilities since they utilize more intensive technology and high skilled labor (Hartmann et al., 2017).

Concluding remarks and implications

     International trade and industrial activities are conducive to the economic development of emerging and developed economies. However, the bolster economic objectives come with the repercussions of environmental externalities and structural transformation challenges. The on-hand research study is an effort to examine the heterogeneous impacts of structural change and institutional quality on economic growth. In doing so, the current study draws novel conclusions and implications regarding the sustainable development goals and sustainable growth in developed economies. This research attempted to explore the nexus among economic growth, economic complexity, export quality, financial development, human capital, renewable energy, and institutional quality for 28 OECD economies. In doing so, the study employed the annual data from 1990 to 2019 and tested three model specifications using extensive empirical analysis such as cross-sectional dependency tests by Pesaran (2015), Westerlund cointegration tests, and Pedroni cointegration tests, FMOLS, and DOLS.

     The empirical results highlight that greener and renewable energy have an important role to play for industrial activities, economic development and it can act as an alternative to achieve sustainable economic growth. Export quality leads to strengthening the trade by improving the quality of products, ultimately it can lead towards the economic progress of countries. Further, it can be interpreted that overall economic complexity encompasses financial development and product complexity, both of which are conducive for the growth of the economy.

Abstract

The aim of this article was to assess the efficiency of the utilization of public funds for climate neutrality. It was concluded that the data gathered in public statistics are not adapted to current challenges and hinder the direct measurement of climate policy objective implementation progress. Due to that, an innovative approach to public intervention efficiency analysis was proposed for the sake of decreasing CO2 emission in 27 European Union (EU) countries, based on Data Envelopment Analysis (DEA) method and soft modeling. Statistical data are derived from the Eurostat database and pertain to the years 2005–2019. It was demonstrated that activity efficiency of the particular EU countries on climate neutrality varied and that together with the increase in public funds spent on environmental protection, the growth of effects in the field of reaching climate neutrality objectives was not observed. The greatest positive impact on achieving climate neutrality objectives was revealed for activities connected with building renewable sources of energy (RES) and there was no correlation detected for expenditures connected with transport infrastructure, which means that public funds used for their construction did not influence climate neutrality. It was established that, in the analyzed period, the decisions on allocating public funds were not taken on the basis of the expected amount of reduction in relation to the volume of outlays. In order to track the reasons for detected inefficiency, 52 projects were analyzed within the case study, which covered 3738 investments in the replacement of heating sources in one region of Poland. It was revealed that the efficiency of those investments varies; however, due to the full availability of data of the acquired results and outlays devoted to them, a synthetic index of efficiency measurement was established that presents the amount of CO2 reduction for EUR 1. When comparing the analyses carried out on macro and micro scales, it was observed that on the scale of the EU, there is a lack of uniform measurements or benchmarks of projects in the field of CO2 emissions reduction. Meanwhile, from the whole EU’s perspective, it should be reasonable to undertake projects with the highest economic efficiency, irrespective of political and geographical aspects. The results obtained should be utilized by decision-makers to elaborate reference methodologies and good practices in order to successfully implement climate objectives and especially the Energy Performance of Buildings Directive (EPBD). What should be established are universal, on the EU scale, measurements and rules for gathering and counting data as well as benchmarks for the particular project types.

Introduction

The reasons for climate change and biodiversity loss are of a global character. The most significant source of them is unsustainable consumption, i.e., lack of full reflection of environmental deterioration and nonrenewable resource consumption in the prices of goods and services. The prices of many products are too low, even when the negative impact of products on the environment, ecosystems, or human health is well documented. This pertains mainly to the utilization of fossil fuels for such purposes as heating buildings, transport, and industrial production. Including all the social and environmental costs in product prices would demand global agreement on the so-called carbon tax or adoption of the global emissions trading system. Not all countries currently agree on this kind of solution. Some countries, such as the EU ones, are not waiting for the implementation of a global agreement and are undertaking activities that lie within the scope of their possibilities. The administrative activities usually concentrate on intervention activities, i.e., on providing public funding for changing the means of management that decrease the emissivity of goods and services. However, as a result of such public intervention, the goods and services are even cheaper than they should be, because due to public funding their prices are lower (if not for the intervention of public funds, all the social costs would have to be included by the producer). Additionally, lower price increases consumption scale, and that drives the mechanism of unsustainable consumption.

Conclusions

The aim of the article was to examine the efficiency of the spending of public funds on climate neutrality in the European Union countries. Twenty-seven countries were selected as a research field. The objective was fully met with the use of the DEA method and soft modeling as well as a case study. Conducted research revealed that most EU countries had low efficiency of utilization of public funds for climate neutrality. This results, to a great extent, from the fact that those expenditures mostly focus on activities related to environmental protection, not climate protection. The efficiency of particular countries’ activities strongly varies. There are countries assessed as efficient because they obtained little, but also did not spend much. Today, in particular countries, decisions are taken on the basis of the expected amount of anticipated level of reduction, without including the amount of outlays necessary to reach it.

Abstract

     Circular economy approaches are commonly depicted by two cycles, where the biological cycle is associated with regeneration in the biosphere and the technical cycle with reuse, refurbishment, and recycling to maintain value and maximize material recovery. This work, instead, presents an alternative vision to the management of carbon-based materials that integrates the two cycles and enables the phasing-out of fossil carbon from the material system. The aim is to investigate the benefits and global potential of a co-recycling system, as an alternative to conventional recycling systems that separate biomass-based materials (e.g., wood, paper) from fossil-based materials (e.g., plastics). Thermochemical recycling technologies enable the conversion of carbon-based waste materials into high-quality synthetic products, promoting circularity and avoiding carbon losses such as carbon emissions and waste accumulation in landfills and nature. Here, the construction and analysis of co-recycling scenarios show how the deployment of thermochemical recycling technologies can decouple the material system from fossil resource extraction. Furthermore, energy use is reduced if pyrolysis and/or gasification are included in the portfolio of recycling technologies. In a decarbonized energy system, deployment of co-recycling can lead to near-zero carbon emissions, while in more carbon-intensive energy systems the choice of thermochemical recycling route is key to limiting carbon emissions.

Introduction

     Carbon-based fuels (mainly fossil fuels but also biomass) account for about 90% of the current global primary energy supply. Carbon is also a building block in a wide range of materials (carbon-based materials; C-materials) used in society. While fossil fuel use is the main cause of anthropogenic greenhouse gas (GHG) emissions, and a transition away from the use of such fuels is essential to limit the global temperature increase to 1.5 °C (IPCC et al., 2018), the production and use of materials such as plastics, cement and steel entail significant GHG emissions (IEA, 2018; Jambeck et al., 2015). The use of biomass-based products can effectively reduce the use of fossil fuels and GHG-intensive materials. There is also scope for substituting existing biobased products with more benign products. For example, cellulose-based textiles can replace cotton which is associated with soil and water depletion, as well as harmful impacts on human health and biodiversity due to excessive use of pesticides and fertilizers (IPCC et al., 2019c; Niinimäki et al., 2020). However, the biomass supply potential is limited by resource constraints (Gerten, 2018) and implications of expanded biomass use for mitigation and other objectives depend on many factors, including soil and climate conditions, biomass type, land management system, scale and pace of deployment, and influence on land use (Calvin et al., 2021). For instance, cropland expansion for energy crop production may cause deforestation, with consequent GHG emissions and negative impacts on biodiversity (IPCC et al., 2019b).

Conclusion

     A co-recycling scenario utilizing advanced thermochemical recycling is proposed and analyzed. The results show that such a scenario can combine natural and synthetic C-materials in the same recycling scheme and that enables to decoupling of the Carbon Material System from the extraction of fossil resources, as well as minimizing waste generation. Advanced thermochemical recycling enables the recovery of any carbon flow (CO2, natural or synthetic, losses, etc.) and the production of high-quality products. A focus on carbon recycling, instead of material recycling, can improve C-materials (wood, paper, plastics, and textiles) resource management, by increasing the resource utilization from 0.7 to 1.1 tC-material/tCRtM, i.e., producing more C-materials than resources used, as well as reducing the CMS losses by half.

Highlights

Abstract

Keywords

1. Introduction

2. Policy context

3. Electricity system modelling assumptions

4. Scenarios

5. Modelling results

6. Cost-benefit estimations

7. Conclusion and policy implications

Credit author statement

Declaration of competing interest

References

Abstract

Long distance power transmission is commonly considered as an option for reducing carbon footprint in future electricity systems. Accordingly, this article presents economic insights in a transcontinental power interconnection linking four Asian countries with Europe. Enhanced electricity trade through the interconnected countries is assessed via techno-economic modelling. For this purpose two electricity system scenarios are developed for the year 2040: (i) a Reference Scenario, where electricity system development follows the plans of the involved system operators and (ii) a so-called Trans-Asia Scenario, where additional power transmission capacities are added to strengthen the electricity trading route crossing the interconnected countries: Turkey, Georgia, Azerbaijan and Kazakhstan. Economic benefits arising from the proposed Trans-Asia Scenario are estimated as a change in social welfare in the electricity system. Modelling results show a 140 M€ increase in annual social welfare for the Trans-Asia Scenario. The subsequent cost-benefit analysis results in a net present value in the range of −221 M€ to 534 M€, at a discount rate of 4%. This implies that over a life-cycle period of 40 years, the evaluated economic benefit may compensate investments between 1598 M€ and 3251 M€ needed for the additional power transmission capacities.

1. Introduction

Long distance power transmission is regularly presented as an enabler for high deployment of centralized renewable energy sources (RES) [1]. Several projects have been implemented providing flexibility in transcontinental power balance between electricity demand and generation [2]. Wu and Zhang [3] presented a feasibility study of an intercontinental electricity trade between Europe and China with 100% RES generation in 2050. This interconnection significantly decreases annual electricity system running costs. However, electricity systems of countries along the Europe-China connection route are not considered. In this regard, Assembayeva et al. [4] developed an electricity market model of Kazakhstan, with possible further expanding modelling capacity in the Central Asian region. Assembayeva et al. [4] indicates power flow congestions in the electricity grid of Kazakhstan during high electricity demand in winter. According to Gea-Bermúdez et al. [5]; grid congestions can be reduced along with electricity production costs through a sound long-term electricity system planning. In the light of the above considerations, this study presents an elaborated techno-economic modelling approach giving insights in investments in additional electricity trade capacity along a route connecting Europe with a selection of Asian countries in 2040.

Transmission grid reinforcements are proposed on top of the planned transmission infrastructure development plans to allow a cross-border electricity trade capacity of 2000 MW in a selected route from Turkey to Kazakhstan, passing through Georgia, Azerbaijan and the Caspian Sea. This route derives from a study by Ardelean and Minnebo [6] and interlinks with the European transmission grid as shown in Fig. 1. The proposed increase in cross-border trade capacity between the Asian countries to 2000 MW is close to the envisaged electricity trade capacity between Bulgaria-Turkey and Greece-Turkey in the ENTSO-E 2040 scenarios [7].

Highlights

Abstract

Keywords

1. Introduction

2. Conceptual background

3. Methodology for estimating financing needs by source

4. From investment by technology to investment by source

5. Learning and dynamics in finance

6. Conclusions and implications

Acknowledgements

Appendix A. Supplementary data

References

Abstract

Numerous studies have presented scenarios regarding energy transition, including the computation of investment costs in various models. Although these studies project detailed investment pathways for different technologies, they do not distinguish between different sources of and types of funding. They tell us what the transition will cost, but not how it will have to be financed. In this paper, we develop a methodology according to which an appropriate financing mix can be calculated from these investment projections based on technology-related assumptions in scenarios. We differentiate between debt and equity as well as between the following sources: public/private Research, Development and Demonstration (RD&D), small-distributed financing, venture capital (equity), public markets (equity), and asset finance (debt and equity provided by institutional investors). We show that major commitments to wind and solar energy need to come from institutional investors in the form of asset finance. In addition, to achieve the transition to a decarbonized power system, government and private investors need to continue investing and extend their engagement in funding research, demonstration, and early deployment. Finally, we present a number of policy options targeting the different sources of finance.

1. Introduction

To reach the targets set by the 2015 Paris Agreement, a significant reduction in CO2 emissions is necessary (IPCC, 2019; OECD/IEA and IRENA, 2017; Rockström et al., 2017), and many studies have projected the required amount of investment in renewable energy (RE) production and/or reduced energy demands to make this happen (see Fig. 1). These investments are, without exception, large and cover both investment in the deployment of mature technologies and the development of new and innovative technologies (Eyraud et al., 2013; Mathews et al., 2010; Polzin, 2017). It is well known from the finance literature, however, that different investments attract very different types of investors, with correspondingly different mandates, risk appetites, and lossabsorbing capacities (Mazzucato and Semieniuk, 2018; Polzin et al., 2017). It is therefore important to consider not only the total amount, but also the mix in which finance should be available to make the energy transition feasible.

Fig. 1 shows the projected average annual investments per technology for a selection of models. These projections show that there is significant variation across models and scenarios; however, what the underlying studies do not explicitly address is what sources of finance actually need to be tapped to finance the total investments in these different technologies. Preliminary work (Mazzucato and Semieniuk, 2018; Polzin and Sanders, 2020) indicates that a qualitative mismatch rather than an actual financing gap may slow down the energy transition. This is, in a sense, good news, as it is easier to redirect available resources than to overcome absolute shortages. Specifically, we need to design policies to better engage private sector financiers. To design such policies, however, we first need to assess and quantify their role in the scenarios covering 2020–2050 (McCollum et al., 2018). McCollum et al. (2013, p. 3) already asserted that “what this mix of investments [sources of finance] should look like is very much an open question, however, especially at the national and regional level.” To address this gap in the literature, we propose a simple method for mapping the readily available and routinely projected vector of investments per technology into a vector of investments according to preferred financing types

Highlights

Abstract

Keywords

1. Introduction

2. Literature review

3. Data, descriptive statistics and empirical strategy

4. Empirical results

5. Conclusion and policy implications

CRediT authorship contribution statement

Declaration of competing interest

Acknowledgements

Appendix.

References

Abstract

This paper investigates the effects of financing constraints on prompting green innovations using a sample of Chinese listed firms in the period 2001–2017. Also, we explore how green finance policies resolve financing constraints of firms to green innovation. The capability of green innovation is found to be impaired when firms face higher financing constraints, and privately owned enterprises tend to be more vulnerable than state-owned ones in this regard. Although green finance policies can effectively ease financing restraints on green innovation overall, green credits are less likely to be available to privately owned enterprises. However, these enterprises which are deeply affected by financing constraints have relatively high innovation capabilities. We suggest the government to provide more supports to privately owned enterprises for investing in green projects. Further, both financial institutions and privately owned enterprises should be required to disclose more information on green credits and green projects, respectively. In addition, the China Banking Regulatory Commission should design a synthetic mechanism for evaluating green performance.

1. Introduction

At the 2015 United Nations Climate Change Conference (COP 21, the Conference of the Parties), 195 participating countries signed the Paris Agreement on the mitigation of climate change, reaching a consensus to limit the increase in global temperature to well below 2 ◦C above preindustrial levels. To achieve such long-term climate goals, many countries have made efforts to promote the development of green industry and green innovation (Acemoglu et al., 2016; Li et al., 2018). The capabilities of enterprises in green innovation, however, are limited by financing constraints. Difficulties in accessing financing resources may greatly impede their investments in green technology (Andersen, 2017). Green innovation of enterprises is particularly hindered from financing constraints because it usually has high uncertainty and low return. As a consequence of the global consensus on climate action, green finance refers to investment and loans related to supporting environmentally sustainable development (GFSG, 2016), which has risen sharply in recent years. It is supposed to provide a supportive financing environment for green development. However, whether green finance policies can promote green innovation by effectively resolving the effects of firms’ financing constraints is still unclear.

China is engaged in green development actively. Investment in green sectors has been increasing and the country has become the world’s leading green investment destination. Recently, China committed to being carbon neutral by 2060, which requires comprehensive investment in green projects and technology (Polzin and Sanders, 2020). Either past successes or future ambitions cannot be achieved without policy support. Intensive efforts have been made by the Chinese government to cope with environmental degradation and pollution. In addition to comprehensive regulations and administrative enforcements, green finance policies have been explicitly introduced to support green development. In 2007, the China Banking Regulatory Commission (CBRC) launched “Opinions on Implementing Environmental Protection Policies and Rules and Preventing Credit Risks” and “Guiding Opinions on the Credit Work for Energy Conservation and Emission Reduction.” These guidelines instruct banks to restrict or cease lending to “Two-high & one overcapacity” industries1 and to implement credit classification management according to the environmental impact of projects.

1- Introduction

2- Coal fired electricity generation and carbon mitigation policy in India

3- Opportunity abatement cost estimation

4- Data and results

5- Conclusions

References

Abstract

This study shows potential cost savings by adoption of emission trading in India. At the Paris Agreement, India pledged to reduce CO2 emissions intensity by about 30–35% by 2030 relative to 2005. Applying joint production function of electricity and CO2 emissions, we find that India could have saved about US$ 5 to 8 billion, if she had constituted an emission trading system, with the provision of banking and borrowing over the study period of 5 years. To our knowledge, this is the first study measuring foregone gains due to absence of a nationwide carbon emission-trading program in coal fired thermal power sector, using an ex-post analysis.

Introduction

At the Paris Agreement in 2015 , India pledged to reduce CO 2 emissions intensity 1 by about 30 -35 percent by 2030 relative to 2005 . Coal based electricity generation sector, with an installed capacity of 222 GW, accounts for about three -fourth of total electricity generation (Central Electricity Authority [CEA], 2018) and will remain dominant source of power generation in India. This sector contributes to about half of the total CO 2 emissions generated in the country (CEA, 2013). Therefore, if India is to achieve the targets announced at the Paris agreement, it is imperative to find cost effective measures of reducing CO 2 emissions in this sector. Carbon pricing is economically the most efficient strategy for reducing the emissions (Aldy and Pizer, 2015; Managi, 2015; Schmalensee and Stavins, 2017). The Paris Agreement offers avenues for new market -based approaches such as emission trading, to countries for realizing their Nationally Determined Contributions (NDCs). Emission trading, popularly known as cap -and -trade program, is one of the way s of putting price on pollution, the other being taxation. Given the heterogeneity in abatement cost s, market -based instruments , such as emission trading , accomplish the targeted emission levels cost effectively , by equalizing marginal abatement cost across the polluters (Carlson et al., 2000). An emission -trading program offers an opportunity to thermal power plants to realize regulatory compliance at lower costs, as compared to CAC regulatory mechanism, by purchasing right s to emit CO 2 emission s from the plants facing lower abatement cost s. Moreover, inter -temporal trading of emissions equalizes marginal abatement costs, not only spatially but also inter -temporally , and thus, further reduces the abatement costs. Note that given the flexibility in regulatory compliance with least cost, investment s in technology or procedures flow to the plants having low abatement cost s (Chan et al., 2012; Goulder and Schein, 2013).

1- Introduction

2- Unfolding China’s pollutant emissions trading practices

3- Regional comparison of PETSs

4- Discussion

5- Conclusion

References

Abstract

Over the past few decades, the pollutant emissions trading policies in China have undergone significant innovation and exploration. It is considered as a market-based approach that became integrated with command-and-control mechanisms such as total emissions control or pollution permits. This study is the first to provide systematic, reflective thinking that tracks the regional initiatives of pollutant emissions trading systems in China. In this article, we divided China’s emissions trading practices into three stages and conducted a comparative qualitative analysis of the country’s eleven provincial emissions trading pilots. We found that provincial pilots are highly diverse and complex regarding the pollutants that can be traded, the industrial sectors involved, the design of trading administration and processes, and the implementation of trading practices such as allowance, pricing and platforms. We also identified four main challenges: legislation setup, monitoring and verification, administrative interference, and the technical quantification of pollutant hotspots. We conclude the article by providing policy implications so that emissions trading policies can be integrated with the newly developed pollution permitting system.

Introduction

The economic incentive approach enables more flexibility and efficiency in environmental management. Emissions trading has been recognized as one of the most effective environmental policies in Western countries (Stavins, 1995; FØRSUND and NÆVDAL, 1997). In the United States, for example, the report on emissions trading policies issued by the Regan Government summarized the practices of banking, bubbles, offsets, and tradable credit (Schwarze and Zapfel, 2000). These practices were integrated into an emissions trading system at the state level, which formalized the market mechanisms to monitor and reduce pollution. The EU Emission Trading System (EU-EST) covers approximately 11 000 power stations and manufacturing plants in the 28 EU Member States, as well as aviation activities in these countries (Boemare and Quirion, 2002). In total, roughly 45% of total EU greenhouse gas emissions are regulated by the EU-ETS.1 China has been piloting pollutant emissions trading systems (PETSs) since the 1980s. Despite the complexities and ambiguities of policy design and implementation, PETS initiatives keep evolving with ongoing challenges of environmental pollution and have become one of the fundamental environmental policies in China for point-source environmental management (Jiang et al., 2016; Guo, 2018). Thus, such initiatives are significantly different from carbon (CO2) emissions trading systems in China (Jotzo and Loschel, € 2014; B. Zhang et al., 2014) since the latter are usually not considered part of China’s fundamental climate mitigation strategies. Most previous studies about PETSs in China apply environmental economics analyses (Cao and Ikeda, 2005; Zhang et al., 2010) to reveal the efficiency of a single emissions trading scheme at the enterprise level, regardless of the regulatory nature of a single pollutant, i.e., CO2 is not considered ak “pollutant” in China at central or local levels. This is probably why the outcomes of PETSs are diverse (Ji et al., 2017; Dickson and Mackenzie, 2018; Xian et al., 2019). Researchers have also pointed out that the maneuverability of the current emissions trading policy, conflicts between different environmental policies, and administrative interference are considered as the main barriers to the success of the SO2 emissions trading programs in China (Wang et al., 2002; Dudek et al. 2004, 2007).

1- Introduction

2- Preliminaries

3- DC microgrid model

4- Battery scheduling by optimization-based control

5- Simulation results

6- Comparison with other models and control strategies

7- Conclusion

References

Abstract

This paper considers a discrete-time scheduling method for the power balancing of a continuous-time DC microgrid system. A high-order dynamics and a resistor network are used for modelling the electrical storage unit and the DC bus of the centralized microgrid system, respectively. A PH (Port-Hamiltonian) formulation on graphs is employed to explicitly describe the microgrid topology. This modelling approach allows us to derive a discrete-time model which preserves the power and energy balance of the physical system. Next, a constrained economic MPC (Model Predictive Control) using the proposed control model is formulated for efficiently managing the microgrid operation. The systematic combination of the network modelling method and optimization-based control allows us to generate the appropriate power profiles. Finally, the benefits of the proposed approach are validated through simulation and comparison results over a particular DC microgrid elevator system under different scenarios and using real numerical data.

Introduction

Nowadays, industrial and research communities are concentrating their attention to microgrid systems and their development for improving the energy reliability of the classical power grid. A microgrid is represented by a group of interconnected customer loads and Distributed Energy Resources (DER) within clearly defined electrical boundaries which acts as a single controllable entity that can connect and disconnect from the grid (known as “islanding”) [1]. DERs are small power sources that can be aggregated to provide the power necessary to meet (part of) a regular demand. It includes the distributed energy storage and generation systems. The distributed energy generation systems are integrated to the local system to reduce the impact on the environment of the fossil fuel resources. However, the electricity price of the external grid varies during a day. It may be expensive when the energy demand is high. Moreover, the power supplied by the distributed energy generation system is unstable [2,3]. Consequently, the distributed energy storage system is used to store energy when it is available and cheap. Then, it is reused in the contrary case. In microgrids, DERs are connected to the load systems through converters to satisfy the energy demand [4,5].