Abstract:
Unlike the commonly designed international carbon markets that only include direct emissions (Scope 1), China, based on its national conditions, also includes indirect emissions (Scope 2) from imported electricity and heat production. With the advancement of the full coverage system for green certificates, the linkage between enterprise green power consumption and the carbon market has become a focal point of debate. To avoid double counting, cross-subsidies, and the risk of "greenwashing", it is proposed to directly deduct the corresponding electricity quantity from green power when accounting for indirect emissions, with the remaining electricity treated as conventional thermal power. Additionally, based on the cost externality and effect externality of green certificates, different time limits should be set for green certificates generated by different types of green electricity projects, green certificates within 6 years of stock projects can be used for carbon market links, and green certificates issued by new projects can be used for 21 months. Only when the proportion of green electricity consumption of carbon market enterprises exceeds the proportion of renewable energy power assessment weight in the province can it be carried out. This proposed method outperforms other approaches regarding simplicity, fairness, and avoidance of double counting. The introduction of this mechanism provides a decision-making reference for the high-quality development of the coupling between China's electricity and carbon markets.