Abstract: Effective supervision is the fundamental premise of emissions trading programs to exert advantages.In a two-stage dynamic game of regulator and polluting firms,the optimal supervision strategies to achieve a fixed aggregate emissions target cost-effectively in emissions trading system is studied,including supervision level,the aggregate supply of permits and penalty shape.Based on gaming analysis,a heterogeneous agent-based experiment platform for regional emissions trading system is established using computational experiment.Then further analysis are done from perspectives of dynamic and boundedrational.The results show that,the optimal strategy to achieve targetis to induce full compliance.This is not simply setting severe punishment,but seeking tradeoff between level of supervision and penalty.Finally,integrating the permitprice directly into the penalty shape allows the policy objective to be achieved more cost-effective.

Key words: emissions trading system, supervision mechanism, gaming analysis, computational experiment