IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v29y2020i5p1992-2000.html
   My bibliography  Save this article

Research on entropy generation strategy and its application in carbon trading market

Author

Listed:
  • Miao Zhenjian
  • Kofi Baah Boamah
  • Xingle Long

Abstract

The study seeks to provide a deeper insight and strategies into the carbon trading market, the internal mechanism, and the linkage mechanism for emission reduction in the carbon trading market right from its inception. The study differs from most prior research on carbon trading, as this current paper incorporates the carbon market with the dissipative structure theory. Based on the dissipative structure theory, this study adapts the entropy generation principle as the base for the carbon trading market. The study captures the following key dimensions: the change of carbon market value, the entropy generation principle of carbon quota trading process, and the replacement process involved in production factors in carbon trading. The study revealed that the entropy generation of the carbon trading market is mainly caused by the cost gradient formed as a result of the cost difference of emission reduction and the increase of production factor input required by economic development. Moreover, the study revealed clearly the dynamics of the entropy index and the carbon market emission reduction efficiency. Thus, the lower the entropy value of the carbon market, the higher the emission reduction efficiency.

Suggested Citation

  • Miao Zhenjian & Kofi Baah Boamah & Xingle Long, 2020. "Research on entropy generation strategy and its application in carbon trading market," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 1992-2000, July.
    • Handle: RePEc:bla:bstrat:v:29:y:2020:i:5:p:1992-2000
    DOI: 10.1002/bse.2483
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.2483
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.2483?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Feng, Zhen-Hua & Wei, Yi-Ming & Wang, Kai, 2012. "Estimating risk for the carbon market via extreme value theory: An empirical analysis of the EU ETS," Applied Energy, Elsevier, vol. 99(C), pages 97-108.
    2. Brian C. Murray & Richard G. Newell & William A. Pizer, 2009. "Balancing Cost and Emissions Certainty: An Allowance Reserve for Cap-and-Trade," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 84-103, Winter.
    3. Rickels Wilfried & Görlich Dennis & Peterson Sonja, 2015. "Explaining European Emission Allowance Price Dynamics: Evidence from Phase II," German Economic Review, De Gruyter, vol. 16(2), pages 181-202, May.
    4. Lin, Boqiang & Jia, Zhijie, 2019. "Impacts of carbon price level in carbon emission trading market," Applied Energy, Elsevier, vol. 239(C), pages 157-170.
    5. Nathaniel O. Keohane, 2009. "Cap and Trade, Rehabilitated: Using Tradable Permits to Control U.S. Greenhouse Gases," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 42-62, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xing Yang & Jun-long Mi & Jin Jiang & Jia-wen Li & Quan-shen Zhang & Meng-meng Geng, 2022. "Carbon sink price prediction based on radial basis kernel function support vector machine regression model [Chaos and order in the capital markets]," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 17, pages 1075-1084.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bo Shen & Fan Dai & Lynn Price & Hongyou Lu, 2014. "California's Cap-and-Trade Programme and Insights for China's Pilot Schemes," Energy & Environment, , vol. 25(3-4), pages 551-575, April.
    2. Wolfgang Buchholz & Jonas Frank & Hans-Dieter Karl & Johannes Pfeiffer & Karen Pittel & Ursula Triebswetter & Jochen Habermann & Wolfgang Mauch & Thomas Staudacher, 2012. "Die Zukunft der Energiemärkte: Ökonomische Analyse und Bewertung von Potenzialen und Handlungsmöglichkeiten," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 57.
    3. Claudia Kettner & Daniela Kletzan-Slamanig & Angela Köppl & Thomas Schinko & Andreas Türk, 2011. "ETCLIP – The Challenge of the European Carbon Market: Emission Trading, Carbon Leakage and Instruments to Stabilise the CO2 Price. Price Volatility in Carbon Markets: Why it Matters and How it Can be ," WIFO Working Papers 409, WIFO.
    4. Dorota Ciesielska-Maciągowska & Dawid Klimczak & Małgorzata Skrzek-Lubasińska, 2021. "Central and Eastern European CO 2 Market—Challenges of Emissions Trading for Energy Companies," Energies, MDPI, vol. 14(4), pages 1-14, February.
    5. Stephan Schott, 2013. "Carbon Pricing Options for Canada," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 109-124, August.
    6. Henckens, M.L.C.M. & Driessen, P.P.J. & Ryngaert, C. & Worrell, E., 2016. "The set-up of an international agreement on the conservation and sustainable use of geologically scarce mineral resources," Resources Policy, Elsevier, vol. 49(C), pages 92-101.
    7. Lawrence H. Goulder & Andrew Schein, 2013. "Carbon Taxes vs. Cap and Trade: A Critical Review," NBER Working Papers 19338, National Bureau of Economic Research, Inc.
    8. Xiangjun Chen & Bo Yan, 2024. "Research on jumps and volatility in China’s carbon market," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-43, February.
    9. de Perthuis, Christian & Trotignon, Raphael, 2014. "Governance of CO2 markets: Lessons from the EU ETS," Energy Policy, Elsevier, vol. 75(C), pages 100-106.
    10. Fankhauser, Samuel & Hepburn, Cameron, 2010. "Designing carbon markets. Part I: Carbon markets in time," Energy Policy, Elsevier, vol. 38(8), pages 4363-4370, August.
    11. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    12. Park, Hojeong & Hong, Won Kyung, 2014. "Korea׳s emission trading scheme and policy design issues to achieve market-efficiency and abatement targets," Energy Policy, Elsevier, vol. 75(C), pages 73-83.
    13. Grüll, Georg & Taschini, Luca, 2011. "Cap-and-trade properties under different hybrid scheme designs," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 107-118, January.
    14. Sam Fankhauser & Cameron Hepburn, 2009. "Carbon markets in space and time," GRI Working Papers 3, Grantham Research Institute on Climate Change and the Environment.
    15. Xiang-Yu Wang & Bao-Jun Tang, 2018. "Review of comparative studies on market mechanisms for carbon emission reduction: a bibliometric analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 94(3), pages 1141-1162, December.
    16. Zhou, Xinxing & Gao, Yan & Wang, Ping & Zhu, Bangzhu & Wu, Zhanchi, 2022. "Does herding behavior exist in China's carbon markets?," Applied Energy, Elsevier, vol. 308(C).
    17. Rachel Bodsky & Domenic Donato & Kevin James & David Porter, 2012. "Experimental Evidence on the Properties of the California’s Cap and Trade Price Containment Reserve," Working Papers 12-12, Chapman University, Economic Science Institute.
    18. William A. Pizer & Brian C. Prest, 2020. "Prices versus Quantities with Policy Updating," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(3), pages 483-518.
    19. Delarue, Erik & Van den Bergh, Kenneth, 2016. "Carbon mitigation in the electric power sector under cap-and-trade and renewables policies," Energy Policy, Elsevier, vol. 92(C), pages 34-44.
    20. Tan, Xiujie & Sun, Qian & Wang, Meiji & Se Cheong, Tsun & Yan Shum, Wai & Huang, Jinpeng, 2022. "Assessing the effects of emissions trading systems on energy consumption and energy mix," Applied Energy, Elsevier, vol. 310(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:29:y:2020:i:5:p:1992-2000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.