Multi-Agents-Based Modeling and Simulation for Carbon Permits Trading in China: A Regional Development Perspective

Abstract

China has been actively taking actions to control carbon emissions and promoting development of a carbon market. However, there are many disadvantages in a carbon market, owing to various designs and policies still under trial and implementation. Adopting the multi-agents technique, we constructed a framework about national carbon market to estimate the effect of a different design of policy made on the GDP (Gross Domestic Product) and environment. In particular, national and regional abatement policies were analyzed in our study. The results showed the carbon-trading mechanism can effectively reduce carbon emissions and make a negative impact on GDP. National abatement can neither be too high nor too low for reducing carbon emissions and maintaining economic stability. For different regions, the central region was impacted the most by a carbon trading mechanism, and the east region was the opposite. Moreover, the “sweeping approach” policy should be replaced by a regional “discriminating policy” because the abatement requirement to the western region was low and to the eastern region was relatively high, which is more beneficial to China’s regional development.