Estimation Carbon Rent in the Cement Industry of Iran: Abatement advantage under Paris Agreement (Experience-based European Union Emissions Trading System)

The present study aims to determine how cement industry profit is affected by considering conditions of implementation of the Paris Agreement. It also aims to determine factors affecting pollution and reduced pollution caused by cement production. In order to achieve these goals, the case study of Iran has been investigated during 2011-2013 using logarithmic mean Divisia index (LMDI). By estimating experimental model, the results represented that environmental pollutions caused by the manufacturing industry can be reduced using new technologies, and alternative fuels. Results also indicate seven factors in the decomposition for pollution emission, including the activity effect, the clinker trade effect, the The clinker share effect, The fuel mix effect, The thermal and electrical energy efficiency effect, and the electricity carbon emission factor effect. We can make distinction between the first two effects that are options for non-technical pollution reduction and other effects that are options for technical pollution reduction. Additionally, results suggest that cement companies of Iran have not created surplus quota and they have not surplus production and profit. This indicate that, unlike European countries that have surplus quota and profit or carbon rent, Iran does not have it, since surplus production quota generated freely has not been generated to lead increased income and wealth creation.