In emissions trading, the initial permit allocation is an intractable issue because it needs to be essentially fair to the participating countries. There are many ways to distribute a given total amount of emissions permits among countries, but the existing distribution methods  such as auctioning and grandfathering  have been debated. Here we describe a new model for permit allocation in emissions trading using the Boltzmann distribution. The Boltzmann distribution is introduced to permit allocation by combining it with concepts in emissions trading. A price determination mechanism for emission permits is then developed in relation to the \beta%DIFDELCMD < } %%% value in the Boltzmann distribution. Finally, it is demonstrated how emissions permits can be practically allocated among participating countries in empirical results . The new allocation model using the Boltzmann distribution describes a most probable, natural, and unbiased distribution of emissions permits among multiple countries. Based on its simplicity and versatility, the model using the Boltzmann distribution has potential for various economic and environmental studies .
In emissions trading, the initial allocation of permits is an intractable issue because it needs to be essentially fair to the participating countries. There are many ways to distribute a given total amount of emissions permits among countries, but the existing distribution methods , such as auctioning and grandfathering , have been debated. In this paper we describe a new method for allocating permits in emissions trading using the Boltzmann distribution. We introduce the Boltzmann distribution to permit allocation by combining it with concepts in emissions trading. %DIFDELCMD < } %%% We then demonstrate through empirical data analysis how emissions permits can be allocated in practice among participating countries . The new allocation method using the Boltzmann distribution describes the most probable, natural, and unbiased distribution of emissions permits among multiple countries. Simple and versatile, this new method holds potential for many economic and environmental applications .
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permit allocation
allocation of permits
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model for permit allocation
method for allocating permits
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We then demonstrate through empirical data analysis
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allocated in practice
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in empirical results
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model
method
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Based on its simplicity and versatility, the model using the Boltzmann distribution has potential for various
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studies
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