How can China allocate CO2 reduction targets at the provincial level considering both equity and efficiency? Evidence from its Copenhagen Accord pledge

It is crucial for China to allocate national carbon abatement targets fairly and efficiently. Essentially, the issue of national target allocation is carbon emission quotas allocation among provinces in China. In the case of China's pledge at Copenhagen Accord, this study employs a modified Fixed Cost Allocation Model (FCAM) to determine permitted emissions of each province in China based on provincial carbon allocation results following Equity principle. Equity principles for carbon emission quotas allocation in our study contain Historical egalitarian, Population egalitarian and Pays ability egalitarian. Provincial allocation results vary in terms of three equity principles, and the allocation results following Pays ability egalitarian is more consistent with Chinese regional development conditions. Thus, in the modified FCAM, the allocation results based on Pays ability egalitarian are selected as constraint condition. The results specify the provinces with higher input-output efficiency obtain more quotas, and carbon emission quotas shift from Central and Western China with less input-output efficiency to Eastern China with higher input-output efficiency. Accordingly, this study proposes the establishment of overall carbon emissions database and provincial carbon market, as well as different low-carbon development path for each province. Our study not only contributes to advancing the existing literature on methodology of regional carbon quota allocation, but also is of special interest to policy makers.