Optimal Joint Production and Emissions Reduction Strategies Considering Consumers’ Environmental Preferences: A Manufacturer’s Perspective

Carbon cap-and-trade mechanism is a government-mandated, market-based scheme to reduce emissions, which has a significant effect on manufacturers’ operation decisions. Based on the cap-and-trade mechanism, this paper studies the joint production and emission reduction problem of a manufacturer. The manufacturer faces emissions-sensitive demand impacted by consumers’ environmental preferences (CEP). An extended newsvendor model is used to find the optimal production quantity and emissions reduction quantity. We explore the impacts of market price of carbon credits, emission reduction investment coefficient and CEP on the optimal strategies. Numerical examples are provided to illustrate the theoretical results and orthogonal experimental design technique was applied to find robust system parameters. It is concluded that among all parameters, emissions cap has the greater impact on the expected profit, which is followed by than the market price of carbon credits. This means that the government plays a major role in economic development. The total carbon emissions are mainly affected by the carbon trading price and the product’s sale price, which indicates the carbon trading market and product market play a larger role in controlling environmental benefits. Several valuable managerial insights on helping governments and industries understand how market conditions change and make better long-term decisions are further concluded.

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Operational Decision Model with Carbon Cap Allocation and Carbon Trading Price

Journal of Open Innovation Technology Market and Complexity ◽

10.3390/joitmc5010011 ◽

2019 ◽

Vol 5 (1) ◽

pp. 11 ◽

Cited By ~ 2

Author(s):

Jinpyo Lee

Keyword(s):

Optimality Condition ◽

Carbon Emission ◽

Stackelberg Game ◽

Emission Trading ◽

Total Carbon ◽

Carbon Trading ◽

Cap And Trade ◽

Trading Market ◽

Production Decision ◽

Trade Market

This paper considers a carbon emission cap and trade market, where the carbon emission cap for each entity (either government or firm) is allocated first and then the carbon trading price is decided interdependently in the carbon trading market among the non-cooperative entities which make their production decision. We assume that there are n entities emitting carbon during the production process. After allocating the carbon (emission) cap for each participating entity in the carbon cap and trade market, each participant makes a production decision using the Newsvendor model given carbon trading price determined in the carbon trading market and trades some amount of its carbon emission, if its carbon emission is below or above its own carbon cap. Here, the carbon trading price depends on how carbon caps over the entities are allocated, since the carbon trading price is determined through the carbon (emission) trading market, which considers total amount of carbon emission being equal to total carbon caps over entities and some fraction of total carbon emission should be from each entity participating in the carbon cap and trade market. Thus, we can see the interdependency among the production decision, carbon cap and carbon trading price. We model this as a non-cooperative Stackelberg game in which carbon cap for each entity is allocated in the first stage and each entity’s production quantity is decided in the second stage considering the carbon trading price determined in the carbon trading market. First, we show the monotonic property of the carbon trading price and each entity’s production over the carbon cap allocation. In addition, we show that there exists an optimality condition for the carbon cap allocation. Using this optimality condition, we provide various results for carbon cap and trade market.

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Production-inventory and emission reduction investment decision under carbon cap-and-trade policy

RAIRO - Operations Research ◽

10.1051/ro/2018033 ◽

2018 ◽

Vol 52 (4-5) ◽

pp. 1043-1067 ◽

Cited By ~ 2

Author(s):

Yuyao Fan ◽

Min Wang ◽

Lindu Zhao

Keyword(s):

Supply Chain ◽

Trade Policy ◽

Carbon Emissions ◽

Emission Reduction ◽

Total Carbon ◽

Compensation Mechanism ◽

Cap And Trade ◽

Emission Permits ◽

Emission Permit ◽

Production Inventory

The increasing amount of carbon emissions has caused global warming and challenged the sustainable development of environment. Governments around the world have implemented carbon policies including carbon cap-and-trade policy. In this paper, we focus on how a two-echelon supply chain manages its carbon footprints in production and inventory under carbon cap-and-trade policy. We extend the classical EOQ (economic order quantity) model and study decisions on production-inventory, carbon trading and emission reduction investment in the decentralized and centralized situations. The results show that emission permit sharing can effectively reduce the total cost and total carbon emissions of the supply chain. Moreover, the manufacturer’s emission reduction effort rises with the increase of the buying and selling prices of emission permits under centralized decision-making. In addition, a compensation mechanism is proposed for the centralized supply chain with emission permit sharing. It is observed that the buying and selling prices of emission permits have a positive influence on the permit sharing price in the compensation mechanism. Meanwhile, the retailer pays less for using the emission permits if it has a higher carbon cap, while the manufacturer with a higher carbon cap is more capable to provide a high compensation for the retailer.

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A joint production and carbon trading policy for unreliable manufacturing systems under cap-and-trade regulation

Journal of Cleaner Production ◽

10.1016/j.jclepro.2021.125973 ◽

2021 ◽

Vol 293 ◽

pp. 125973

Author(s):

Arezou Entezaminia ◽

Ali Gharbi ◽

Mustapha Ouhimmou

Keyword(s):

Manufacturing Systems ◽

Joint Production ◽

Carbon Trading ◽

Cap And Trade ◽

Trade Regulation ◽

Trading Policy

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Research on the Influence of Carbon Trading on Jibei Grid Considering the Co-Ordination of Beijing, Tianjin and Hebei Province

Applied Mechanics and Materials ◽

10.4028/www.scientific.net/amm.675-677.1875 ◽

2014 ◽

Vol 675-677 ◽

pp. 1875-1879

Author(s):

Zhong Kang Wei ◽

Yan Ling Du ◽

Dun Nan Liu ◽

Yu Jie Xu ◽

Yuan Zhuo Li

Keyword(s):

Emission Reduction ◽

Carbon Emission ◽

Electric Power Industry ◽

Hebei Province ◽

Total Carbon ◽

Environmental Crisis ◽

Carbon Trading ◽

Actual Situation ◽

Allocation Scheme ◽

Generating Capacity

As the energy and environmental crisis intensifies, controlling total carbon emission in electric power industry has been an important way to achieve the goals of energy conservation and emission reduction. Beijing and Tianjin have lanched carbon trading pilot successively. As a part of the co-ordination, it’s imperative for Jibei to join carbon trading. Controlling the total carbon emission can’t be separated with making carbon initial quota, which will certainly influence generating capacity of generating enterprises in Jibei. Consequently, Jibei grid should purchase more clean electricity in outside province. Firstly, common methods of carbon quota distribution have been introduced in this paper and three scenes of carbon emission reduction have been set. Then, generating capacity in Jibei has been calculated in three scenes, and the influence of purchasing power in outside province on Jibei grid has been analyzed. Result shows that Benchmarking and target constraint are both feasible and allocation scheme can be chosen reasonably based on the actual situation.

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The Multi-Period Dynamic Optimization with Carbon Emissions Reduction under Cap-and-Trade

Discrete Dynamics in Nature and Society ◽

10.1155/2019/6987132 ◽

2019 ◽

Vol 2019 ◽

pp. 1-12 ◽

Cited By ~ 1

Author(s):

Baiyun Yuan ◽

Bingmei Gu ◽

Chunming Xu

Keyword(s):

Carbon Emissions ◽

Emission Reduction ◽

Emissions Reduction ◽

Low Carbon ◽

Cap And Trade ◽

Emission Quota ◽

Certified Emission Reduction ◽

Reduction Strategies ◽

The Government ◽

Emission Reduction Strategies

Under low carbon environment, a multi-period emissions reduction problem for manufacturer is investigated in the paper, where we assume that the government sets mandatory carbon emissions limit to all the enterprises by free of charge and allows the carbon emission quota to be traded or banked inter-temporally in the carbon trading market. Using discrete-time optimal control theory, the optimal emission reduction strategies for each period are firstly explored for maximizing the sum of net profit under cap-and-trade. The optimal carbon emissions, permit trading quantity, and the number of buying Certified Emission Reduction (CER) are obtained in each period. Furthermore, the effects of carbon price and initial carbon quota given by the government on the firm’s emission reduction strategies are discussed. Finally, numerical examples are illustrated to verify the proposed model, and some managerial inferences for a multi-period emission reduction are provided in conclusions.

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The Study of the Impact of Carbon Finance Effect on Carbon Emissions in Beijing-Tianjin-Hebei Region—Based on Logarithmic Mean Divisia Index Decomposition Analysis

Sustainability ◽

10.3390/su11051465 ◽

2019 ◽

Vol 11 (5) ◽

pp. 1465 ◽

Cited By ~ 4

Author(s):

Li Li ◽

Di Liu ◽

Jian Hou ◽

Dandan Xu ◽

Wenbo Chao

Keyword(s):

Global Warming ◽

Carbon Emissions ◽

Emission Reduction ◽

Carbon Emission ◽

Total Carbon ◽

Carbon Trading ◽

Logarithmic Mean ◽

Carbon Emission Reduction ◽

Carbon Finance ◽

The Impact

The negative effects of global warming are becoming more and more serious. The fundamental way to prevent global warming is by reducing carbon dioxide emissions. Achieving this has become a key concern for all countries. The logarithmic mean divisia index model was constructed to decompose the total carbon emission increment. Carbon finance effect was divided into green credit effect and carbon trading effect to analyze the impact of carbon finance on carbon emissions. The results showed that the total carbon emission reduction value caused by green credit effect from 2010 to 2016 in the Beijing-Tianjin-Hebei region was 66193.96 million tons, and the added value of carbon emission caused by carbon trading effect was 80266.68 million tons. There are regional differences in the effects of carbon finance on carbon emissions in these regions. It can be concluded that to a certain extent, green credit can reduce carbon emissions, and carbon trading can increase carbon emissions. Using the gradual expansion of carbon finance trading and market mechanism of carbon finance to solve the problem of carbon emission can improve the efficiency of carbon emission reduction.

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Effects of the carbon credits buy-back policy on manufacturing/remanufacturing decisions of the capital-constrained manufacturer

Journal of Industrial and Management Optimization ◽

10.3934/jimo.2021198 ◽

2021 ◽

Vol 0 (0) ◽

pp. 0

Author(s):

Yongjian Wang ◽

Fei Wang

Keyword(s):

Carbon Emissions ◽

Carbon Price ◽

Total Carbon ◽

Emissions Reduction ◽

Carbon Credits ◽

Policy Makers ◽

Non Linear Programming ◽

Implementation Effect ◽

Buy Back ◽

Specific Implementation

<p style='text-indent:20px;'>Under the emissions trading mechanism, this article explores optimal manufacturing/remanufacturing decisions considering the carbon credits buy-back policy by focusing on the value of carbon assets. First, two non-linear programming models are formulated under the cases with/without the carbon credits buy-back policy and solved using the Kuhn-Tucker Conditions (KKT). This article then systematically investigated the impacts of the carbon credits buy-back policy and related crucial parameters on production quantities, selling quantity of carbon quotas, total profits and total carbon emissions resorting to the theoretical analysis and numerical analysis. The results show that the carbon credits buy-back policy could improve operating situations, while specific implementation effect also depends on some factors. Among them, the higher value of the carbon savings of unit remanufactured product could strengthen the advantages of the carbon credits buy-back policy, and the rising carbon savings more significantly promotes the remanufacturing activities. Furthermore, both the carbon price and carbon quotas have significant effects on manufacturing/remanufacturing decisions under the carbon credits buy-back policy. Meanwhile, the carbon price can more effectively adjust production and emissions reduction activities, and consequently controls carbon emissions while protecting production activities. Finally, the results proposed in this paper provide guidance suggestions to manufacturers and policy-makers.</p>

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Carbon Emission Estimation of Assembled Composite Concrete Beams during Construction

Energies ◽

10.3390/en14071810 ◽

2021 ◽

Vol 14 (7) ◽

pp. 1810

Author(s):

Kaitong Xu ◽

Haibo Kang ◽

Wei Wang ◽

Ping Jiang ◽

Na Li

Keyword(s):

Life Cycle ◽

Carbon Emissions ◽

Emission Reduction ◽

Carbon Emission ◽

Composite Beams ◽

Total Carbon ◽

Construction Process ◽

Low Carbon ◽

Carbon Emission Reduction ◽

The Government

At present, the issue of carbon emissions from buildings has become a hot topic, and carbon emission reduction is also becoming a political and economic contest for countries. As a result, the government and researchers have gradually begun to attach great importance to the industrialization of low-carbon and energy-saving buildings. The rise of prefabricated buildings has promoted a major transformation of the construction methods in the construction industry, which is conducive to reducing the consumption of resources and energy, and of great significance in promoting the low-carbon emission reduction of industrial buildings. This article mainly studies the calculation model for carbon emissions of the three-stage life cycle of component production, logistics transportation, and on-site installation in the whole construction process of composite beams for prefabricated buildings. The construction of CG-2 composite beams in Fujian province, China, was taken as the example. Based on the life cycle assessment method, carbon emissions from the actual construction process of composite beams were evaluated, and that generated by the composite beam components during the transportation stage by using diesel, gasoline, and electric energy consumption methods were compared in detail. The results show that (1) the carbon emissions generated by composite beams during the production stage were relatively high, accounting for 80.8% of the total carbon emissions, while during the transport stage and installation stage, they only accounted for 7.6% and 11.6%, respectively; and (2) during the transportation stage with three different energy-consuming trucks, the carbon emissions from diesel fuel trucks were higher, reaching 186.05 kg, followed by gasoline trucks, which generated about 115.68 kg; electric trucks produced the lowest, only 12.24 kg.

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Effect of Green Construction on a Building’s Carbon Emission and Its Price at Materialization

Sustainability ◽

10.3390/su13020642 ◽

2021 ◽

Vol 13 (2) ◽

pp. 642

Author(s):

Shuangxi Zhou ◽

Zhenzhen Guo ◽

Yang Ding ◽

Jingliang Dong ◽

Jianming Le ◽

...

Keyword(s):

Greenhouse Gases ◽

Emission Reduction ◽

Carbon Emission ◽

High Efficiency ◽

Carbon Price ◽

Carbon Trading ◽

Construction Companies ◽

Green Construction ◽

The World ◽

Total Price

Buildings consume many resources and generate greenhouse gases during construction. One of the main sources of greenhouse gases is carbon emission associated with buildings. This research is based on the computing rule of carbon emission at the materialization stage. By taking the features of green construction into consideration, quantitative analysis on construction carbon emission was undertaken via Life Cycle Assessment (LCA). Making use of Vensim (a system dynamics software package), we analyzed the amount of carbon emission at the materialization stage and determined the major subsystems affecting the carbon emission, then took into comprehensive consideration the differences of each subsystem’s carbon emission under different construction technologies. Under the mechanism of carbon trade at the materialization stage, the total price of carbon trades remains unchanged, while the trading price of each subsystem is adjusted. Under these conditions, a coefficient for step-wise increases in carbon price was proposed. By establishing such a system of gradient prices, construction companies are encouraged to adopt high-efficiency emission reduction technologies. Meanwhile, the system also provides a reference for the formulation of price-based policies about buildings’ carbon trading, and accelerates the process of energy conservation and emission reduction in China and the world at large.

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