Optimal Production Policy With The Uncertain Price Of Emission Trading

In recent years,green sustainable development has become more and more popular;the Emission Trading is a basic mechanism innovation and system reform in ecosystem protection,which contributes to the promotion of green production concept in enterprises.With the awakening of green consciousness,the influence of consumer buying behavior is not only concern about product price but also more and more attention to its green degree.It is very meaningful to study the enterprise,especially the serious polluting enterprises,how to formulate the production operation strategy under the Emission Trading policy to achieve sustainable and healthy development.At this point,production optimization includes not only production decision but also cutting decision and transaction decision.Facing the unstable phenomena of the market of Emission Trading,the optimization problem of production can be described as a risk decision-making problem.Aiming at depicting the behavior of decision-makers in real life and the phenomenon of deviation from risk neutrality,the problem of production optimization is discussed by the Prospect Theory when the sewage-dependent enterprises consider the instability of the emission right market and consumers' green preference.In particular,the following three main tasks about above-mentioned problems have been studied in this paper:(1)The research method and the basic content of the Prospect Theory have been introduced in this paper.And its applicability in the production optimization problem of the enterprise is briefly discussed under the mechanism of Emission Trading.The relevant value function and the weight function are constructed to depict theoretically complex behavior about production the sewage-dependent enterprises under the Emission Trading.The results show that the actual production decision of the enterprise will deviate from the risk-neutral optimal strategy,which is influenced by the risk attitude and the expectation profit.(2)By analyzing the relationship between the level of reduction and the price of emission permits and trading and assuming that the reduction level is variable,the production model is built including optimum output and reduction level.The results show that the higher the price of emission permits and trading,the higher the level of pollution reduction,but the resulting pollution reduction costs and transaction costs are not necessarily higher,the trend that production optimization and reduction level change with the enterprise's psychological expectation profit,loss aversion parameter and risk attitude parameter more accord with the actual decision behavior.(3)Consumer green preference can not only promote the pollution emission reduction of enterprises,but also lead to carry out production technology innovation.Suppose the market demand of the product is influenced by the price and the green level of the product.Enterprises will increase the investment in pollution reduction,emission trading market and enterprise relations more closely and the impact of green production strategy more obvious.In formulating production strategy,enterprises face emission trading market attitude is particularly important,the results show that changing the green level of products can not only reduce pollution emissions,but also improve the overall profitability of enterprises.At the same time,consumer green preference will affect the attitude of enterprises to deal with the emission trading market,and then has some influence on the production decision.