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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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    1. Li, Wei & Gao, Shubin, 2018. "Prospective on energy related carbon emissions peak integrating optimized intelligent algorithm with dry process technique application for China's cement industry," Energy, Elsevier, vol. 165(PB), pages 33-54.
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    4. Talaei, Alireza & Pier, David & Iyer, Aishwarya V. & Ahiduzzaman, Md & Kumar, Amit, 2019. "Assessment of long-term energy efficiency improvement and greenhouse gas emissions mitigation options for the cement industry," Energy, Elsevier, vol. 170(C), pages 1051-1066.
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    6. Tesema, Gudise & Worrell, Ernst, 2015. "Energy efficiency improvement potentials for the cement industry in Ethiopia," Energy, Elsevier, vol. 93(P2), pages 2042-2052.
    7. Susanne Arvidsson & John Dumay, 2022. "Corporate ESG reporting quantity, quality and performance: Where to now for environmental policy and practice?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1091-1110, March.
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    Cited by:

    1. Luísa Marques & Maria Vieira & José Condeço & Henrique Sousa & Carlos Henriques & Maria Mateus, 2024. "Review of Power-to-Liquid (PtL) Technology for Renewable Methanol (e-MeOH): Recent Developments, Emerging Trends and Prospects for the Cement Plant Industry," Energies, MDPI, vol. 17(22), pages 1-41, November.
    2. Luísa Marques & Maria Vieira & José Condeço & Carlos Henriques & Maria Mateus, 2024. "A Mini-Review on Recent Developments and Improvements in CO 2 Catalytic Conversion to Methanol: Prospects for the Cement Plant Industry," Energies, MDPI, vol. 17(21), pages 1-23, October.
    3. Heriantonius Silalahi & Nandi Maulana & Budi Kurnia, 2024. "Determinants of Tax Regulations Referring to ESG Principles on Company Performance in Indonesia," Journal Economic Business Innovation, PT. Inovasi Analisis Data, vol. 1(3), pages 231-248.

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