• Journal of Korean Institute of Industrial Engineers
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• v.43 no.3
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• pp.203-212
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• 2017

Emissions Trading System (ETS) is utilized in many countries, including South Korea, as an efficient policy to abate GHG (Greenhouse Gas) emissions. Grandfathering on the basis of historic emissions is used as the way to allocate permits in South Korea. It, however, has caused an increase in the emission permits and lack of equity. To overcome these drawbacks, we propose an alternative DEA model for centralized allocation of emission abatement to evaluate the amount of emissions abatement by company based on the energy efficiency. In addition, an empirical analysis of 36 assigned companies for ETS in Korean metal industry is conducted to validate the feasibility of the proposed model. The result of the analysis shows that energy-efficient companies achieve reduced target of the emissions abatement and companies with low energy efficiency score are turned out to have contrary outcome, against the result of applying Grandfathering.