Initial Allocation % in Intensity-Based Markets

In a brand-new carbon market, firms start period 1 holding zero allowances. This "cold start" can trigger an artificial buying frenzy — prices spike and market dynamics look unrealistic before firms have had time to bank credits.

Real-world markets rarely start cold. India's CCTS launched formally in 2025, but the underlying framework traces back to the Perform, Achieve and Trade (PAT) scheme that ran from 2012–2022. Firms that over-performed their PAT targets accumulated energy-savings certificates that are treated as carry-forward credits in the CCTS transition. By year 1 of the simulation, many participants already hold a meaningful allowance buffer.

The Initial Allocation % setting models this carry-forward. A value of 50 means each firm begins year 1 holding allowances equivalent to 50% of its expected first-period compliance need, as calculated by run_period_start. Setting it to 0 gives a pure cold-start. Values above 100 represent markets where very long-lived banking has produced significant over-allocation relative to near-term compliance demand — useful for studying price collapse or banking bubble dynamics.

The Postgres function run_period_start reads config.intensity_initial_allocation_pct directly; no further migration is required.