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

Area of Science:

• Environmental Economics
• Climate Policy Analysis
• Computational Economics

Background:

• China is actively implementing carbon emission controls and developing a national carbon market.
• Existing carbon market designs and policies face challenges and disadvantages during trial and implementation phases.

Purpose of the Study:

• To construct a multi-agent framework for analyzing national carbon market policies.
• To estimate the impact of different policy designs on China's Gross Domestic Product (GDP) and environment.
• To analyze the effects of national and regional carbon abatement policies.

Main Methods:

• Utilized a multi-agent technique to build a simulation framework.
• Modeled national and regional carbon abatement policies within the framework.
• Estimated policy impacts on GDP and environmental metrics.

Main Results:

• Carbon trading mechanisms effectively reduce carbon emissions but negatively impact GDP.
• Optimal national abatement levels are crucial for balancing emission reduction and economic stability.
• Regional policy impacts vary, with the central region most affected and the east least affected by carbon trading.

Conclusions:

• A regional "discriminating policy" is superior to a "sweeping approach" for China's carbon market.
• Tailored abatement requirements for western and eastern regions promote more balanced national development.
• Policy adjustments are recommended to enhance the effectiveness and equity of China's carbon market.