Horizontal CO(2) Compensation in the Yangtze River Delta Based on CO(2) Footprints and CO(2) Emissions Efficiency

Purpose: In this study, we attempted to reduce the negative economic externalities related to Carbon Dioxide (CO(2)) emissions in the Yangtze River Delta region (YRD) and designed a cross-municipality responsibility-sharing mechanism. Methods: We estimated the municipal CO(2) footprints in the YRD from 2000 to 2019 based on nighttime light data and measured CO(2) emissions efficiency using a super slack-based measurement (super-SBM) model. Based on this, we designed a scenario of horizontal CO(2) compensation among the YRD’s municipalities from the perspectives of both CO(2) footprints and CO(2) trading (CO(2) unit prices in trading were determined based on CO(2) emissions efficiency). Results: The results showed the following: (1) The CO(2) footprints evolution of the YRD municipalities could be divided into four categories, among which, eleven municipalities showed a decreasing trend. Thirteen municipalities stabilized their CO(2) footprints. Thirteen municipalities exhibited strong growth in their CO(2) footprints, whereas four municipalities maintained a low level of slow growth. (2) Spatially, CO(2) emissions efficiency evolved from a broad distribution of low values to a mosaic distribution of multi-type zones. (3) After 2011, the ratio of CO(2) footprint compensation amounts to local Gross Domestic Product (GDP) in most municipalities was less than 0.01%, with its center of gravity shifting cyclically. It was appropriate to start charging the CO(2) footprint compensation amounts after 2011, with a dynamic adjustment of 3 years. (4) After 2007, the supply–demand relationship of CO(2) trading continued to deteriorate, and it eased in 2016. However, its operational mechanism was still very fragile and highly dependent on a few pioneering municipalities. Innovations: In this study, we designed a horizontal CO(2) compensation mechanism from the binary perspective of CO(2) footprints and CO(2) trading. In this mechanism, the former determines the CO(2) footprint compensation amounts paid by each municipality based on whether the CO(2) footprint exceeds its CO(2) allowance. The latter determines the CO(2) trading compensation amounts paid by the purchasing municipalities based on their CO(2) emissions efficiency. This system balances equity and efficiency and provides new ideas for horizontal CO(2) compensation.