The Research Of Manufacturing Enterprise’ Optimal Operation Strategies With Emission Trading

As environmental issues become increasingly serious, reduction of polluting emissions has become a crucial task in China’s social development. Manufacturing enterprises, as the main source of emissions, become the principal institutions to be regulated for emission control. Emission trading mechanism serves as an environmental management tool highlighting both market incentives and policy orientation, through which the manufacturing enterprises with different marginal cost of emission reduction can trade emission right index so as to reduce costs or increase profit by lowering emissions. In such case market becomes the major decisive factor for environmental resources allocation, and manufacturing enterprises will take the initiative to reduce emissions, thus the overall social emission reduction target can be achieved.More than two decades have passed since 1980 s when the emission trading pilot campaign has been gradually launched in some provinces and cities. The next 2 to 3 years will witness the implementation of a nationwide emission trading pilot, which means the practice of emission trading will be gradually perfected and deeply reformed and the majority of manufacturing enterprises will experience a change in environmental management policy. In this context, this paper gives an intensive study on the influence posed on manufacturing enterprises by emission trading and the corresponding strategic change. The study is of practical significance in two aspects. First, it gives reference to the government in making policies to strengthen guidance and intervention. Second, it also provides management approaches for manufacturing enterprises to enhance their enterprise decision behavior and competitiveness.This paper makes research from the following aspects with valuable results attained.First, through practical research this paper analyzes the status quo, problems and related causes of the emission trading enterprises from the macro perspective. By means of analyzing the data collected from over 20 pilot provinces and cities, this paper studies on the enterprise’s participation in emission trading and the design of such mechanism. Some problems can be found through this study, including the low level of enterprise participation and relative inactive market, while imperfect design of emission trading and the enterprise’s inexperience are the main causes.Second, through theoretical analysis, this paper investigates the impacts of emission trading mechanism on the enterprise strategies in China. Based on the status quo analysis, this paper sorts out various designs of emission trading mechanism in China; analyzes the effect factors and transmission routs of the emission trading on the manufacturing enterprises; explores and discusses the strategy changes of manufacturing enterprises under the emission trading mechanism, and the impact of the enterprise’s internal factors and product market demand on the change. This research reaches the conclusion: under the emission trading mechanism, manufacturing enterprises may change their coping strategies such as strategic planning, production, pricing, procurement and investment on emission reduction. These coping strategy changes are related with the enterprise’s internal factors and product market demand.Then, through quantitative research, from a micro level, this paper discusses the optimal production and pricing, the strategies about emission purchasing and investment on emission reduction of the manufactures under the emission trading mechanism. Based on the previous research, considering the product market stochastic demand, this paper has separately established profit function and target function under different constraint condition in primary market and secondary market, with K-T condition, Hessian matrix, sensitivity analysis and numerical simulation, this research reaches the conclusion: in primary and secondary market of emission trading mechanism, manufacturing enterprises have unique optimal production and pricing combination strategy, emission purchasing strategy and strategy of investment on emission reduction; under different strategy, the optimal strategy and the maximum expect profit of the manufacturing enterprises may be influenced by limited emission permits, primary market price, secondary market price, production cost and product price. The secondary market of emission trading and product market demand fluctuation may affect the optimal strategy and maximum expect profit of the manufacturing enterprises, the secondary market of emission trading is beneficial to both enterprise and society.At last, combine with the previous conclusion, this paper makes suggestions and strategies respectively for manufacturing enterprises and governments. Under the emission trading, enterprises can gain low emission competitive advantages by strengthening strategy planning, refining production management, adjusting marketing strategy and attaching great importance to investment on emission reduction; pay attention to the diversity and dynamic of emission trading volume control target, primary and secondary market mechanism design; ensure consistency and sustainability of the emission trading market supporting system construction.