The synergistic effect between Renewable Portfolio Standards and carbon emission trading system: A perspective of China

Renewable Portfolio Standards (RPS) and carbon emission trading (CET) system are the top-level system design of China's energy low-carbon transformation, which have great strategic significance for realizing the “carbon peak in 2030 and carbon neutrality in 2060”. At present, China's tradable green certificates market and CET market are still in the initial stage. The implementation single system may have diverse trials and errors in its initial stage, and the market activity and transaction frequency are low. Therefore, this paper aims to explore whether the synergistic effect between the two systems can effectively promote China's energy low-carbon transformation. This paper establishes the system dynamic model of the synergistic effect between the RPS and CET in China's electricity market to reveal the influence mechanism and the synergistic effect. The results show that: (1) There is a positive synergistic effect between the RPS and CET, which will change with the institutional parameters. (2) The simultaneous implementation of the RPS and CET can effectively stimulate market vitality and promote the development of the renewable energy industry. (3) Higher quota and lower benchmark price can optimize power source structure, and improve social welfare and institutional performance.