Carbon emission trading | EPFL Graph Search

Emission trading (ETS) for carbon dioxide (CO2) and other greenhouse gases (GHG) is a form of carbon pricing; also known as cap and trade (CAT) or carbon pricing. It is an approach to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions. Emissions trading works by setting a quantitative total limit on the emissions produced by all participating emitters. As a result, the price automatically adjusts to this target. This is the main advantage compared to a fixed carbon tax. Under emission trading, a polluter having more emissions than their quota has to purchase the right to emit more. The entity having fewer emissions sells the right to emit carbon to other entities. As a result, the most cost-effective carbon reduction methods would be exploited first. ETS and carbon taxes are a common method for countries in their attempts to meet their pledges under the Paris Agreement. Carbon ETS are in operation in China, the European Union, and other countries. However, they are usually not harmonized with any defined carbon budgets, which are required to maintain global warming below the critical thresholds of 1.5 °C or "well below" 2 °C. The existing schemes only cover a limited scope of emissions. The EU-ETS focuses on industry and large power generation, leaving the introduction of additional schemes for transport and private consumption to the member states. Though units are counted in tonnes of carbon dioxide equivalent, other potent GHGs such as methane () or nitrous oxide () from agriculture are usually not part these schemes yet. Apart from that, an oversupply leads to low prices of allowances with almost no effect on fossil fuel combustion. In September 2021, emission trade allowances (ETAs) covered a wide price range from €7/tCO2 in China's new national carbon market to €63/tCO2 in the EU-ETS.

The embodied flow of built-up land in China?s interregional trade and its implications for regional carbon balance

Qinli Lu

Built-up land intensively concentrates human activities, and its area or the changes in its intensity dramatically affect the regional carbon balance. This study proposed a new framework to assess how in China, the interregional trade?s use of built-up land affects regional carbon balance with regard to the initial maintained land and the expanded built-up land. Then, a multiregional input-output model was used to simultaneously analyse China?s built-up land flow in interregional trade and the effect on carbon balance. Finally, hidden regional inequality was analysed. The results show that the domestic trade pulled indirect external built-up land use reached to 100286 km2 in 2012 and caused 28084 ? 104 t external province pulled carbon emissions for whole China, including 286 ? 104 t from vegetation carbon storage loss. Regionally, more developed regions were always net receivers of built-up land use, in contrast, less developed regions more frequently acted as net suppliers, but most regions experienced economic and environmental deficits. The majority of other provinces experienced a contradictory status of loss of economic profit or environmental profit. For sustainable development and regional equality, more developed regions should provide more economic and technological support for effective built-up land use and emissions reduction to less developed regions.

ELSEVIER2021

Imbalance and drivers of carbon emissions embodied in trade along the Belt and Road Initiative

Qinli Lu, Qi Wen

A continuous growth of international trade, especially between developing countries, has greatly increased carbon dioxide (CO2) emissions associated with energy consumption over the past two decades. Given the more intensified intraregional cooperation and trade within the Belt and Road Initiative (BRI), this study aims to trace the imbalance of CO2 embodied in trade between nations in BRI and the rest of the world, providing new insights into the drivers of emissions growth by contrasting consumption, production and technological differences-based perspectives. Results indicate that the BRI contributed to over 50% of global carbon footprint and 92% of its increase in 1995-2015. The BRI was a net exporter of trade-embodied emissions, whose technological-adjusted carbon footprint remained remarkably large due to comparatively high carbon intensity. Geographically, carbon leakage has gradually moved from China and India to other BRI countries, especially to Southeast Asia, West Asia and Africa. Technological change was the key driver of emissions reduction, followed by the change in industrial structure. The growth in final demand per capita was the most important driver for the growth of CO2 emissions in BRI. Improving carbon efficiency remains a critical step for BRI nations to slow down not only emissions growth but also carbon leakage. The paper managed to provide novel insights into the carbon leakage in BRI by contrasting the consumption, production and technological differences-based perspectives, thus being able to better inform policymakers on region-specific low-carbon transition and global climate governance.

ELSEVIER SCI LTD2020

The shaping effects of innovation and technology: from micro business model evolution to macro environment sustainability

Qinli Lu

Innovation is a prerequisite guarantee for the development of a country in this new era. It is an important driver not just for corporate growth but also for national social and economic transformation. Considering the strategic supporting role of innovation in the modern economic system, this thesis approaches the shaping effects of innovation and technology mainly from two important micro and macro perspectives, business model evolution and national sustainable development. The first essay takes business model innovation (BMI) in China as an entry point to investigate how novel elements can shape business models. There is a widespread perception that Chinese companies, compared to their Western counterparts, are not good at creating novel products and services. But in the arenas of e-commerce and other digital businesses, Chinese companies have become highly successful. This has led some observers to hypothesize that while Chinese firms may not excel at developing new-to-the-world products and services, they may be good in inventing new-to-the-world business models. To explore this phenomenon, I analyzed 137 suggested innovative business models in detail to investigate new-to-the-world features, yielding an overview of BMI in China. Based on these cases, a theoretical framework was proposed to investigate how innovative features can prompt successful BMI. I summarize the reasons behind BMI in China. The second essay explores the support from open innovation (OI) for BMI based on literature review and some inspiration from the first essay. Theoretical underpinnings are often cited as a necessity to advance the research of BMI. The study proposes that the development of OI and BMI keeps pace within a dynamic innovation process. To develop a consistent body of knowledge about BMI and OI, this conceptual paper sheds light on the relationships between OI and BMI by providing a framework and discussing its implications. The main investigations are as follows: 1) Why OI has strong impacts on BM development; 2) How OI can shape BMs; 3) What support OI can provide for BMI. The third essay analyzes the shaping effects of technology on environmental issues by carrying out an empirical study of tracing the imbalance of carbon emissions embodied in trade. The technological differences among developing and developed nations are tremendous, which have kept having strong impacts not only on economic and societal development but also on environmental sustainability. Thus, this study provides a new and critical perspective to reconsider the imbalance of carbon emissions regionally and globally, revealing essential policy implications for region-specific sustainable development strategies. The thesis makes several important contributions. For micro business model evolution, the thesis develops a theoretical framework to show how the values are delivered in a business model system and how innovative features can further prompt successful business model innovations, as well as a comprehensive analysis of the theoretical underpinning from open innovation for business model advance. For macro environmental sustainability, the thesis presents a comprehensive spatio-temporal analysis of carbon emissions embodied in trades of nations within and beyond BRI, contributing to methodological advances of measuring the impacts of technological differences on carbon footprints and emissions leakage, which is largely underexplored in current studies.

EPFL2020

The shaping effects of innovation and technology: from micro business model evolution to macro environment sustainability

Qinli Lu

EPFL2020