ABSTRACT
This chapter reviews the policy design of the power sector in the guangdong emissions trading scheme (GD ETS), and finds that the percentage of paid allowance is the primary factor reflected in the carbon cost for generators with an average efficiency. The characteristics of policy design for the power sector in the GD ETS are also considered. Next, we compare and analyze the overall cost of coal-fired power plants in the GD ETS and determine the critical point of the impact of carbon cost on the profit of the plants. Based on the allowance allocation method of the power plants in the GD ETS, the paid allowance is the only carbon cost factor for generators with average efficiency, as the output uncertainty is eliminated by ex-post adjustment. The greenhouse gas emissions in the power system can be divided into two parts: direct emissions from the production; and indirect emissions from consumption.
