title: A model for interprovincial air pollution control based on futures prices.
abstract: Based on the current status of research on tradable emission rights futures, this paper introduces basic market-related assumptions for China's interprovincial air pollution control problem. The authors construct an interprovincial air pollution control model based on futures prices: the model calculated the spot price of emission rights using a classic futures pricing formula, and determined the identities of buyers and sellers for various provinces according to a partitioning criterion, thereby revealing five trading markets. To ensure interprovincial cooperation, a rational allocation result for the benefits from this model was achieved using the Shapley value method to construct an optimal reduction program and to determine the optimal annual decisions for each province. Finally, the Beijing-Tianjin-Hebei region was used as a case study, as this region has recently experienced serious pollution. It was found that the model reduced the overall cost of reducing SO2 pollution. Moreover, each province can lower its cost for air pollution reduction, resulting in a win-win solution. Adopting the model would therefore enhance regional cooperation and promote the control of China's air pollution.
  
  
  CONCLUSIONS
  The authors construct an interprovincial air pollution control model based on futures prices. The Shapley value method is used to rationally allocate the cooperation benefit. Interprovincial pollution control reduces the overall reduction cost of SO2. Each province can lower its cost for air pollution reduction by cooperation.
authors.forename: Laijun
authors.initials: L
authors.lastname: Zhao
authors.forename: Jian
authors.initials: J
authors.lastname: Xue
authors.forename: Huaizhu Oliver
authors.initials: HO
authors.lastname: Gao
authors.forename: Changmin
authors.initials: C
authors.lastname: Li
authors.forename: Rongbing
authors.initials: R
authors.lastname: Huang
mesh_terms: D000393:Air Pollutants / Q000191:economics; D000397:Air Pollution / Q000191:economics* / Q000517:prevention & control*; D002681:China; D004784:Environmental Monitoring; D058735:Environmental Policy / Q000191:economics; D018803:Models, Economic; D001335:Vehicle Emissions
chemical_list: D000393:Air Pollutants; D001335:Vehicle Emissions