Does initial allocation of carbon quota do well on regional economy and CO2 emission?

This study attempts to investigate the impact of the initial allocation quotas and carbon trading prices on regional economy development and CO2 emissions. The models under different initial allocation were established respectively Shanghai was taken as the instance to investigate the varying of GDP and CO2 emission under different scenarios. The results showed that the increased carbon trading would reduce the amount of carbon emissions and GDP while the proportion of free quotas had gradually declined. and the varying carbon trading prices resulted in amplifying fluctuating in the CO2 emissions and the total GDP. The research in this paper would help to optimize the initial carbon quota plan.