Research Of Purchasing Strategy Of Carbon Emissions Quota

This paper studies corporations’ strategies of purchasing carbon emission quota and how to make manufacturing decisions under constrained carbon emissions and gives numerical simulation.Firstly, based on the trading and rechargeable auction mechanism of carbon emission quota in Shenzhen, China, this paper studies the purchasing strategies of corporations within a performance cycle. Through building the cost-minimizing model, this paper models and computes the problem on multi-periods purchasing decision, whose theoretical outcome indicates that corporations will buy the quota at the beginning of each period, making the remaining carbon emission quota reach a definite threshold. After further simplification of the model, this paper gives the expression of approximate solution regardless of decision feedback. Further, through studying the characteristics of the solution, this paper find that corporations have the willingness to buy quota in advance, in other words, corporations will complete most of the purchases at the beginning of the first period, which to some extent corresponds to the expectation of carbon emission demand; the purchases occurred after the first period is passive, whose intention is to mind the gap between the available quota and the threshold caused by demand fluctuation, and corresponds to the variance of carbon emission quota demand in a way.As to numerical simulation, the analysis of parameter sensitivity shows that the threshold increases as the punishment cost grows, also, the threshold increases when the variance of carbon emission grows; the analysis of cost demonstrates that when corporations decide by the approximate solution obtained without considering feedback, both the threshold and the cost increases at a small scale, therefore, corporations can make purchase decisions without considering feedback instead when they need to make decisions immediately.Secondly, this paper analyzes how corporations control their order and purchase decisions and carbon emissions to avoid large costs incurred by inability to perform the contract due to the carbon emission quota gap. This paper presents a two-period operation model, where corporations make order decisions at the first period and purchase decisions at the second period and the demand in the first period is partly uncertain, whose exact value can be observed in the second period; this paper models and computes the order and purchase decisions with constrained carbon emission when the definite part of demand is additive or multiplicative, the conclusion drawn from which is that in the selling phase, corporations can reduce carbon emission by raising prices, with profits decreasing and in the order phase, the order quantity has a upper threshold, the order which surpasses this threshold cannot enter the selling phase due to the constrained carbon emission quota, therefore, the optimal value is the smaller one of the optimal value obtained without constraints and the threshold obtained with constraints.Finally, this paper makes a summary and points out the potential research directions.