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A Decision-Making System for Low Carbon Manufacturing.

Changsong Ma1,2,3, Tiantong Yuan4, Yuzhong Yao3

  • 1Mianyang Teachers' College, Mianyang 621000, China.

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Summary

Manufacturing firms must adapt to carbon cap-and-trade policies by adjusting output or trading emission rights. Investing in green technology can boost profits, especially with downward substitution effects.

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Area of Science:

  • Operations Research
  • Environmental Economics
  • Manufacturing Systems

Background:

  • Manufacturing enterprises face stochastic market demand and increasing pressure for low-carbon production.
  • Carbon cap-and-trade policies significantly influence operational decisions and profitability.
  • Downward substitution and green technology adoption are key factors in sustainable manufacturing.

Purpose of the Study:

  • To analyze low-carbon manufacturing decision-making under carbon cap-and-trade policies.
  • To investigate the impact of downward substitution and green technology investment on enterprise profits.
  • To provide strategic insights for manufacturing firms navigating environmental regulations.

Main Methods:

  • Stochastic market demand modeling.
  • Analysis of decision-making under carbon cap-and-trade constraints.
  • Evaluation of green technology input and downward substitution effects.

Main Results:

  • Carbon cap-and-trade policies exert a substantial influence on manufacturing production and strategies.
  • Enterprises can mitigate policy impacts by adjusting output and engaging in carbon emission right trading.
  • Green technology investment enhances expected profits, particularly when downward substitution is present.

Conclusions:

  • Manufacturing firms must proactively address carbon emission reduction policies.
  • Strategic adjustments in production and investment in green technology are crucial for profitability and sustainability.
  • Understanding market dynamics like downward substitution is vital for effective low-carbon strategies.