Research On Dynamic Optimal Management Decisions With Emission Permits Trading Scheme

Several emission permits trading markets have been emerged in world's main countries and regions,such as European Union,North American,and China.The issue of over emission of greenhouse gas has been solved preliminarily with emission permits trading scheme.In the meantime,both government and enterprise should confront the tradeoff between emission permits trading and operations management.This thesis should present optimal control and differential game frameworks to model the tradeoff problems,and reformulate them to Hamilton-Jacobi-Bellman(HJB)system.Through solving the HJB system,we can obtain the dynamic optimal management decisions and the corresponding payoff function.The detailed are as follows:Firstlt,this thesis studies the energy efficiency management problem with emission permits trading scheme.Decision maker could improve the energy efficiency in two ways,i.e.,undertaking indigenous innovation and absorbing foreign knowledge diffusion.This thesis presents an optimal feedback control model to deal with the problem of energy efficiency management.Especially,an emission permits trading scheme is considered in our model,inwhich the decision maker can trade the emission permits flexibly.Optimal control theory isused to derive a Hamilton-Jacobi-Bellman(HJB)equation satisfied by the value function,and then an upwind finite difference method is proposed to solve it.The stability of this method is demonstrated and the accuracy,as well as the usefulness,is shown by the numerical examples.The optimal management strategies,which maximize the discounted stream of the net revenue,together with the value functions,are obtained.The effects of the emission permits price and other parameters in the established model on the results have been also examined.The results show that the influences of emission permits price on net revenue for the economic agents with different initial quotas are quite different.All the results demonstrate that the emission permits trading scheme plays an important role in the energy efficiency management.Secondly,this thesis obtains optimal emission levels and abatement expenditures in a finite-horizon transboundary pollution game with emission trading between two regions.The results show that emission trading has a big impact on the optimal strategies and profits of the two regions.Additionally,cooperation between the regions leads to increased abatement and lower emissions,resulting in a lower pollution stock.Thirdly,this thesis presents a stochastic differential game to model the transboundary industrial pollution problems with emission permits trading.More generally,the process of emission permits price is assumed to be stochastic and to follow a geometric Brownian motion(GBM).Stochastic optimal control theory is used to derive the system of Hamilton-Jacobi-Bellman(HJB)equations satisfied by the value functions for the cooperative and the noncooperative games,respectively,and then a so-called fitted finite volume method is proposed to solve it.The efficiency and the usefulness of this method are illustrated by the numerical experiments.The two regions' cooperative and noncooperative optimal emission paths,which maximize the regions' discounted streams of the net revenues,together with the value functions,are obtained.Additionally,this thesis can also obtain the threshold conditions for the two regions to decide whether they cooperate or not in different cases.The effects of parameters in the established model on the results have been also examined.All the results demonstrate that the stochastic emission permits prices can motivate the players to make more flexible strategic decisions in the games.Fourthly,this thesis examines the impacts of emission permits trading and foresight on low carbon supply chain behaviors.In a manufacturer-retailer channel,the unit production cost will decrease with the accumulation of production because of the presence of learning by doing,and the market demand is influenced by the emission level per unit production due to the improvement of consumers'environmental awareness.The results show that the emission permits price and unit production emission play an important role in the choice of channel members' pricing strategies.It is necessary for the farsighted decision maker to be patient and to be confident of the future from the profit perspective.For em ission reduction strategy,the integrated channel's emission reduction level is much higher than the one in decentralized channel.Additionally,when the emission permits price is high enough,there will be a free-riding in decentralized channel,i.e.the retailer acquires extra benefit from the manufacturer's emission reduction behavior.Lastly,this thesis presents a mean field game to model the production behaviors of a very large number of producers,whose carbon emissions are regulated by government.Especially,an emission permits trading scheme is considered in our model,in which each enterprise can trade its own permits flexibly.By means of the mean field equilibrium,this thesis obtain a Hamilton-Jacobi-Bellman(HJB)equation coupled with a Kolmogorov equation,which are satisfied by the adjoint state and the density of producers(agents),respectively.Then,a so-called fitted finite volume method is proposed to solve the HJB equation and the Kolmogorov equation.The eff-iciency and the usefulness of this method are illustrated by the numerical experiments.Under different conditions,the equilibrium states as well as the effects of the emission permits price are examined,which demonstrates that the emission permits trading scheme influences the producers' behaviors,that is,more populations would like to choose a lower rather than a higher emission level when the emission permits are expensive.The main innovation of this thesis is that,it models the energy efficiency management problem of a single subject,the Nash game between two regions,the Stackelberg game between manufacture and retailer in low carbon supply chain,as well as the mean field game between infinite producers,as the optimal control model or differential game model,respectively.And then,the decision makers' dynamic optimal management decisions with emission permits trading scheme can be obtained by using analytical and numerical method to solve the models,In a word,this thesis studies the decision problem of a single subject,the game of two players,as well as the mean field equilibrium of infinite players with emission permits trading scheme,and provides the theoretical foundation for policy maker in the process of management decision.