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Optimising Decarbonisation Investment for Firms towards Environmental Sustainability

Author

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  • Trung-Hieu Tran

    (Laboratory for Urban Complexity and Sustainability, University of Nottingham, Nottingham NG7 2RB, UK)

  • Yong Mao

    (School of Physics & Astronomy, University of Nottingham, Nottingham NG7 2RD, UK)

  • Peer-Olaf Siebers

    (School of Computer Science, University of Nottingham, Nottingham NG8 1BB, UK)

Abstract

We develop a mixed-integer non-linear programming model for firms’ decarbonisation investment decision-making towards a sustainable environment. Our model seeks the optimal investment for a firm to achieve maximum profit under constraints derived from its environmental protection awareness and the government’s taxation policy. We use an uncertainty theory to formulate the relationship of a firm’s environmental protection awareness and its investment budget levels. Governments’ taxation policy is modelled by a step-wise linear function, where reduced carbon dioxide emission can help the firm reduce taxation. A linearisation is proposed to solve the non-linear problem efficiently. A case study for a sector of electronic component manufacturers in Nottingham, the United Kingdom, demonstrates the practical implementation of the proposed model. Several large-sized instances, which were randomly generated, were utilised to evaluate the the efficiency of model in terms of computational time. Our model can be used to explore budget options to obtain higher profits under a particular taxation policy.

Suggested Citation

  • Trung-Hieu Tran & Yong Mao & Peer-Olaf Siebers, 2019. "Optimising Decarbonisation Investment for Firms towards Environmental Sustainability," Sustainability, MDPI, vol. 11(20), pages 1-19, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5718-:d:277026
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    2. Maciej Ciołek & Izabela Emerling & Katarzyna Olejko & Beata Sadowska & Magdalena Wójcik-Jurkiewicz, 2022. "Assumptions of the Energy Policy of the Country versus Investment Outlays Related to the Purchase of Alternative Fuels: Poland as a Case Study," Energies, MDPI, vol. 15(5), pages 1-18, March.
    3. Teresa Famulska & Jan Kaczmarzyk & Małgorzata Grząba-Włoszek, 2022. "Environmental Taxes in the Member States of the European Union—Trends in Energy Taxes," Energies, MDPI, vol. 15(22), pages 1-20, November.
    4. Nabajyoti Bhattacharjee & Nabendu Sen, 2022. "A sustainable production inventory model for profit maximization under optimum raw material input rate during production," OPSEARCH, Springer;Operational Research Society of India, vol. 59(2), pages 667-693, June.
    5. Nabajyoti Bhattacharjee & Nabendu Sen, 2021. "An inventory model to study the effect of the probabilistic rate of carbon emission on the profit earned by a supplier," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(4), pages 5-33.

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