Joint decisions on emission reduction and order quantity by a risk-averse firm under cap-and-trade regulation

2021 ◽  
pp. 107783
Author(s):  
Qi Qi ◽  
Ren-Qian Zhang ◽  
Qingguo Bai
Keyword(s):  
Emission Reduction ◽  
Risk Averse ◽  
Order Quantity ◽  
Cap And Trade ◽  
Trade Regulation ◽  
Joint Decisions

scholarly journals Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand

2020 ◽  
Vol 17 (3) ◽  
pp. 1010 ◽  
Author(s):  
Hongxia Sun ◽  
Jie Yang ◽  
Yang Zhong
Keyword(s):  
Decision Making ◽  
Carbon Emissions ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Reduction Rate ◽  
Risk Averse ◽  
Cap And Trade ◽  
Carbon Emission Reduction ◽  
Optimal Decisions ◽  
The Government

With the increasingly serious problem of environmental pollution, reducing carbon emissions has become an urgent task for all countries. The cap-and-trade (C&T) policy has gained international recognition and has been adopted by several countries. In this paper, considering the uncertainty of market demand, we discuss the carbon emission reduction and price policies of two risk-averse competitive manufacturers under the C&T policy. The two manufacturers have two competitive behaviors: simultaneous decision making and sequential decision making. Two models were constructed for these behaviors. The optimal decisions, carbon emission reduction rate, and price were obtained from these two models. Furthermore, in this paper the effects of some key parameters on the optimal decision are discussed, and some managerial insights are obtained. The results show that the lower the manufacturers’ risk aversion level is, the higher their carbon emission reduction rate and utilities. As the carbon quota increases, the manufacturers’ optimal carbon reduction rate and utilities increase. Considering consumers’ environmental awareness, it is more beneficial for the government to reduce the carbon quota and motivate manufacturers’ internal enthusiasm for emission reduction. The government can, through macro control of the market, make carbon trading prices increase appropriately and encourage manufacturers to reduce carbon emissions.

Stackelberg game based co-firing biomass with coal under carbon cap-and-trade regulation

2021 ◽  
pp. 0958305X2110415
Author(s):  
Zongtang Xie ◽  
Hongxia Liu
Keyword(s):  
Emission Reduction ◽  
Power Plants ◽  
Carbon Emission ◽  
Stackelberg Game ◽  
Cap And Trade ◽  
Carbon Emission Reduction ◽  
Trade Regulation ◽  
Social Welfare Maximization ◽  
Emission Quota ◽  
Interactive Algorithm

Coal-fired power industry is under enormous pressure to accomplish carbon emission reduction targets. This paper proposes a bi-level multi-objective model for co-firing biomass with coal under carbon cap-and-trade regulation which considers a leader-follower Stackelberg game between the authority and the coal-fired power plants. The upper level regards social welfare maximization and allocation satisfaction maximization as its multiple objectives, while the lower level attempts to maximize the profits of each coal-fired power plant. The inherent uncertainty prompts the motivation for employing fuzzy set theory to characterize the uncertain parameters and determine their exact values. A case study from Shandong Province, China is provided to demonstrate the practicality and efficiency of the optimization model. [Formula: see text]-constraint method and interactive algorithm are used to solve the model, and furthermore the solutions associated with different free carbon emission quota levels and minimal allocation satisfactions have been generated to examine the influences. Based on the analysis and discussion, the methodology can meet the carbon emission reduction goals and transit to a lower-carbon power generation. It also assists the decision makers to develop desired quota allocation strategy in accordance with their attitudes and actual conditions.

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