Abstract: West-East power transmission project of China southern power grid is based hydropower and clean hydropower replacement the high emission of thermal power, with significant environmental benefits, but the economic compensation is very limited. Carbon emissions trading is introduced into the West-East power transmission. The method of initial quota allocation of Carbon Emission Trading which oriented clean energy generation is proposed considering the actual situation of China Southern Power Grid provinces. Firstly, according to historical carbon emissions, carbon reduction coefficient is ensured and the initial carbon allowances are get. Secondly, the second round of allocation Carbon allowances could be get based on the proportion of clean energy power generation capacity. Finally, using this method, the four provinces(districts) in the south of China were measured in 2015. The results were in agreement with the actual environmental capacity, provided the trading space for carbon trading, which is conducive to the development of carbon trading, and indicate that the method is scientific and effective.

Key words: carbon emission trading, initial quota, low carbon, risk, west-east power transmission project, China Southern Power Grid