A Joint Decisions Study On Carbon Emission Reduction And Trading Considering Technology Maturity And Ownership Cost

Global warming has caused extensive attentions around the world.In order to achieve the goals of emission reduction,the governments have introduced mandatory emission reduction laws and regulations,and actively promoted the construction of carbon trading market.Under Cap-and-Trade mechanism,Chinese manufactures are facing more severe challenges.It is critical for them to consider how to balance economic and environmental benefits,how to make the production plan,how to reduce emissions,how to make decisions of carbon resources allocation to maximize their profits.So researches on these aspects is quite significant both for the enterprises and the governments.Under this circumstance,this paper established a multi-period optimization model to study the joint decisions of manufactures' self-purification and carbon trading.The innovation of this paper is as followed.Firstly,a multi-period decision-making model was built which considered whether doing self-purification projects as discrete variables.Different from other projects bringing fixed amount reductions,the effect of self-purification project in this model is the emission reduction per unit of production,and this effect is going to last once the projects ends.Secondly,the reduction on the cost of self-purification project was considered due to the progress of the technology.Thirdly,the opportunity cost of holding carbon emissions was added to this model because when the manufactures choose to hold the emissions rather than sell them,they will lose the chance of investment which can help them earn additional revenue.This paper chose the data from the chemical industry.The software Lingo and VBA programing were used to solve the mathematical model and do some numerical experiments.With the analyses of the results,some suggestions were given to the governments and the manufacturers.The government should allocate emission quotas properly by analyzing the characteristics of total emissions,self-purification technologies and costs between different industries.When the self-purification technology is getting more and more mature,doing self-purification earlier can bring more reduction on the costs,so manufacturers should focus on the development of self-purification technology.What's more,they should balance between the costs and effects of self-purification to decide which project to be conducted.As they have to afford the opportunity costs when they hold the carbon permits,they should choose the proper time for the carbon trading by considering the total emissions and carbon price.