![Sample our Engineering & Technology journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5933/TOC-Subject-Sample-2021-Engineering-Tech.jpg"})
Abstract
This paper discusses mechanisms for the allocation of emission permits (AEP) among a group of manufacturing companies aiming at controlling the total emission level of the group. Data envelopment analysis is adopted and extended to construct the AEP models. Proposed methods allocate the permits on the basis of the current input and output levels of individual firms, rather than historical records. Two variations of AEP mechanisms are considered. One situation is that one of the member firms dominates the responsibility of allocating emission permits on behalf of the group (individual AEP scenario). This dominating firm will maximise its own emission permit before allocating permits among other members in the group. The other situation is that a third-party central governing body is centrally responsible for coordinating the AEP among all group members (Central AEP scenario). Proposed mechanisms are applied to analyse efficiencies of a group of paper mills. The result shows that the mode of central AEP mechanism is a better choice than that of the individual AEP mechanism. Central AEP not only maximises the whole efficiency of the group but also improves efficiencies of individual firms. In contrast, with individual AEP, one firm gains efficiency at the loss of others.
Acknowledgements
Authors would like to acknowledge the Zhejiang Provincial, Hangzhou Municipal and Lin’an City governments for partial financial supports, 2009 Guangdong Modern Information Service Fund (GDIID2009IS048), HKSAR RGC GRF HKU 712112E, 2010 Guangdong Department of Science and Technology Funding (2010B050100023), National Natural Science Funds of China (No. 70901069 and No. 71222106), and Scholarship Award for Excellent Doctoral Student granted by Ministry of Education.