A new approach of carbon emission allocation among stakeholders: An expansion of multiregional and multisectoral dynamic energy-economic model THERESIA

This paper aims at the assessment of the sectoral/regional partial participation in the global warming coalition applying the Multiregional and Multisectoral Dynamic Energy-Economic Model THERESIA based on GTAP database, dealing with 15 world regions and 12 non-energy industry sectors and 7 energy sectors to assess the middle-to long-term global warming policies. This study consists of the following three steps: Firstly, I distribute the carbon emission of power generation sector to the consumer and the generator according to the conversion efficiency, i.e., the generator is responsible for (1.0 - efficiency)*(total carbon emission) and the consumer is for the rest. Secondly, based on the above carbon emission allocation, the carbon emission of the certain industry is embodied in the products. Thus, indirect carbon trading embodied in the commodities can be calculated. Finally, THERESIA simulations generate and compare the outcomes of regional/sectoral participation where (1) only iron and steel industry, chemical industry and power generation industry participate, (2) only ANNEX-I regions in Kyoto protocol participate in the warming coalition, and (3) there are other various participation scenarios. The simulation results suggest that (1) this method clearly shows the indirect carbon emission embodied in the production structure reflecting the difference in the energy supply structure, (2) the carbon emission accounting method influences the international industry structure and GDP losses under the global carbon emission policies, and (3) when carbon emission is embodied in the products, indirect "carbon export" often exceeds the "carbon import" embodied in the commodities in the OECD regions.