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Production Decision Model for the Cement Industry in Pursuit of Carbon Neutrality: Analysis of the Impact of Carbon Tax and Carbon Credit Costs

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  • Wen-Hsien Tsai

    (Department of Business Administration, National Central University, Jhongli, Taoyuan 32001, Taiwan)

  • Wei-Hong Lin

    (Department of Business Administration, National Central University, Jhongli, Taoyuan 32001, Taiwan)

Abstract

One of the solutions to achieve the goal of net-zero emissions by 2050 is to try to reduce the carbon emission by using the carbon tax or carbon credit (carbon right). This paper examines the impact of carbon taxes and carbon credit costs on the cement industry, focusing on ESG indicators and corporate profits. Utilizing Activity-Based Costing and the Theory of Constraints, a production decision model is developed and analyzed using mathematical programming. The paper categorizes carbon tax models into continuous and discontinuous progressive tax rates, taking into account potential government policies like emission tax exemptions and carbon trading. It finds that reducing emission caps is more effective than increasing carbon tax rates in curbing emissions. These insights can assist governments in policy formulation and provide a reference framework for establishing carbon tax systems.

Suggested Citation

  • Wen-Hsien Tsai & Wei-Hong Lin, 2024. "Production Decision Model for the Cement Industry in Pursuit of Carbon Neutrality: Analysis of the Impact of Carbon Tax and Carbon Credit Costs," Sustainability, MDPI, vol. 16(6), pages 1-22, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:6:p:2251-:d:1353283
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    References listed on IDEAS

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    5. Nuno Bento, Gianfranco Gianfrate, and Joseph E. Aldy, 2021. "National Climate Policies and Corporate Internal Carbon Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
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