Optimal Pricing of the Carbon Trading Market Based on a Demand-Supply Model

The Kyoto Protocol has clearly specified various methods and measures of reducing greenhouse gases, and the reduction of emissions using the land-use change and forestry (LUCF) methods has become legally enforced as well. Countries all over the world are actively developing their local emission trading mechanisms in hopes of aligning with those international standards. Among them, the carbon trading mechanism has been widely perceived by the world as an important economic instrument for reducing greenhouse gases. In this study, we first established a theoretical economic model of supply and demand for four carbon trading mechanisms, and then derived the optimal conditions to decide the optimal trading price and trading duration of carbon contract with endogenous and exogenous carbon prices.

Issue Date:
Aug 02 2016
Publication Type:
Conference Paper/ Presentation
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 Record created 2017-04-01, last modified 2020-10-28

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