Comparison of production decision-making models under carbon tax and carbon rights trading

Tsai, Wen Hsien; Lu, Yin-Hwa; Hsieh, Chu-Lun

doi:10.1016/j.jclepro.2022.134462

Cited by 12 publications

(12 citation statements)

References 54 publications

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“…This study uses ABC to estimate costs associated with shoemaking because ABC can help producers to allocate manufacturing overhead and related costs to products more accurately and to identify non-value-added costs [35]. Furthermore, using ABC and the theory of constraints allows producers to achieve the optimal product mix and effectively increase profits [3,36]. ABC is an essential theory in management accounting [11,37].…”

Section: Methodsmentioning

confidence: 99%

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Sustainable Decision Model for Circular Economy towards Net Zero Emissions under Industry 4.0

Hsieh,

Tsai

2023

Processes

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The world produces more than 20 billion pairs of shoes every year, and the greenhouse gas emissions of the shoe industry account for 1.4% of the world. This research, taking the knitted footwear industry as an example, combines the concepts of mathematical programming and carbon emissions to discuss the impact of a circular economy sustainable decision-making model (including four carbon tax functions) to achieve net zero emissions under Industry 4.0 on company profits and product structure. The findings suggest that using activity-based costing to measure the attribution of various costs during process improvement allows companies to more accurately capture the carbon cost of producing each pair of shoes. In addition, under the trend of global efforts to reduce carbon emissions, if the price of carbon taxes or carbon rights is not enough to affect companies’ profits, companies will not pay attention to the impact of carbon emissions. To ensure a sustainable production model, the shoe industry should work with brand customers to reduce the effects of products on the environment, coordinate with brand customers’ sustainable development milestones, and formulate a carbon reduction path to achieve zero carbon emission growth goals. Future research can apply these research models, incorporating the carbon tax and carbon rights proposed by this paper to the other industries. In addition, the research also can be extended to explore the consumer behavior for the newly developed knitted footwear.

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Section: Methodsmentioning

confidence: 99%

“…This article uses mathematical programming methods to establish an analytical model based on the company's production and sales. It considers factors including the carbon tax and carbon rights purchase [36], as well as various production and sales constrictions, to find the product mix that maximizes corporate profits.…”

Section: Methodsmentioning

confidence: 99%

Sustainable Decision Model for Circular Economy towards Net Zero Emissions under Industry 4.0

Hsieh,

Tsai

2023

Processes

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“…He also argued that profits are negative under carbon tax regulation, while the effects of cap-and-trade regulation on that are uncertain, which is determined by the carbon cap. Moreover, carbon tax and ETS regulation promote the recycling of defective products (Tsai et al, 2022) and increase the output of green remanufactured products (Chang et al, 2017).…”

Section: Operating Decisions Under Emission Regulationmentioning

confidence: 99%

Carbon allowance allocation rules under emission intensity regulation: Grandfathering versus benchmarking

Sun

Wang

2023

Manage Decis Econ

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This paper compares the impacts of grandfathering and benchmarking rules on firms' operating decisions, consumer surplus, and social welfare with different emission intensity limits. The findings suggest that with tight emission intensity limits, grandfathering rules are more effective in controlling carbon emissions and enhancing social welfare. Benchmarking rule with relaxed emission intensity can incentivize firms to increase output, lower product prices, and increase consumer surplus. Under relaxed intensity regulation, grandfathering rule can encourage more potential entrants to participate in the product market, and benchmarking rule can motivate firms to take more outputs, resulting higher consumer surplus and more carbon emissions.

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“…This method disassembles each product or service into the most basic operating activities and then uses accurate cost-tracing and allocation methods to calculate a reasonable cost [14,16,31]. In cost calculation, direct cost is easier to be accurate retroactively [13]. However, the allocation of indirect costs has become a critical point.…”

Section: Green Activity-based Costing and Theory Of Constraintsmentioning

confidence: 99%

“…In addition, this article not only analyzes the different carbon tax cost equations and carbon rights trading mechanisms of the glass industry under the green economy and circular economy but also considers the carbon reduction impact of adding appropriate recycled raw materials in the glass production process. The best production plan simulates how the enterprise can achieve the maximum profit under the product configuration, cost consumption, and production quantity and observes how various carbon taxes, carbon rights trading mechanisms, and recycling systems will affect the carbon emissions and profits of the enterprise-a kind of influence [13][14][15][16]. The rest of this study will be arranged as follows: section two discusses the carbon emission of the glass industry and the development of a circular economy, carbon tax and carbon rights-related systems, and the application of green activity-based costing and the restriction theory.…”

Section: Introductionmentioning

confidence: 99%

Towards Carbon Neutrality and Circular Economy in the Glass Industry by Using the Production Decision Model

Hsieh,

Tsai

2023

Energies

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In the modern age, where global warming is intensifying year by year, carbon reduction has long been an issue that countries all over the world must pay attention to. Therefore, governments have established a carbon tax and trading system to control the total carbon emissions of each country. According to the European Container Glass Federation (FEVE), every 10% recycled waste glass can reduce carbon dioxide emissions by 5%. Recycling waste glass will not only save the cost of raw materials but also make a significant contribution to sustainable development. This study uses the circular economy concept in the glass industry to recycle waste glass. It combines activity-based costing (ABC) and the Theory of Constraints (TOCs) to establish a production decision-making model, including carbon tax and trading. The objectives of this study are to solve the problem through mathematical programming to explore the impact of the carbon tax and carbon rights cost on corporate profits and to provide the government with the results as a reference for establishing a carbon tax system.

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Comparison of production decision-making models under carbon tax and carbon rights trading

Cited by 12 publications

References 54 publications

Sustainable Decision Model for Circular Economy towards Net Zero Emissions under Industry 4.0

Sustainable Decision Model for Circular Economy towards Net Zero Emissions under Industry 4.0

Carbon allowance allocation rules under emission intensity regulation: Grandfathering versus benchmarking

Towards Carbon Neutrality and Circular Economy in the Glass Industry by Using the Production Decision Model

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