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Emission abatement for production system across locations with heterogeneous emission profiles

  • Special issue “systems science & cybernetic” (Vol.26 No.3) continued
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Abstract

This paper investigates a production system in which the desired system state is a reduction of emissions and the controlling action plan is altering carbon price. From the operations perspective, we develop a model to study how increasing carbon emission costs may affect the joint production and location decisions for a manufacturer across different locations. Specifically, our model incorporates economies of scale and explicitly links product demand, production costs and carbon emission levels to location decisions. The firm's decisions in production batch size and locations are then optimised. The system state of emission are analysed under different carbon prices. Finally we check the alignment of objectives in costs and emissions for the system. The results show that for a production system with economies of scale, the production allocation is transformed to a location choice problem after optimising the costs. Raising the carbon price reduces the carbon emissions but may not be able to induce the production to be placed in an emission efficient place. We propose a hybrid policy combining carbon price and free emission allowance to fully align the cost efficiency and emission efficiency and characterise the link between the emission target and the carbon price.

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Acknowledgments

This research is supported by the National Science Foundation of China (No. 71401117, No 71340007). The authors thank the editor and the anonymous referees whose comments and suggestions have significantly improved the quality of the paper.

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Authors and Affiliations

  1. School of Business, Sichuan University, Chengdu, 610064, China

    Peng Wu & Jiuping Xu

  2. Engineering Research Center of Low Carbon Technology and Economy, Sichuan University, Chengdu, 610064, China

    Jiuping Xu

Authors
  1. Peng Wu
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  2. Jiuping Xu
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Correspondence to Jiuping Xu.

Additional information

Peng Wu is an associate professor in Sichuan University. He obtained his Ph.D. in Tsinghua University in 2010. His research interests include low-carbon operations management and supply chain management.

Jiuping Xu is a professor in Sichuan University. He obtained his Ph.D. of applied mathematics from Tsinghua University, Beijing, China; and Ph.D. of physical chemistry from Sichuan University, Chengdu, China, in 1995 and 1999, respectively. Prof. Xu has been appointed as an Academician of the International Academy of Systems and Cybernetic Sciences since 2010. He is also the Honorary Academician of Academy of Sciences of Moldova, and the Foreign Academician of Mongolian National Academy of Sciences. He has published over 40 books by Springer, Taylor & Francis, and over 400 international peer-reviewed journal papers in areas of uncertainty decision making, systems engineering, economic theorem, and information science. His current research interests include low carbon economics, uncertainty decision making, and complex systems with applications.

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Wu, P., Xu, J. Emission abatement for production system across locations with heterogeneous emission profiles. J. Syst. Sci. Syst. Eng. 26, 531–548 (2017). https://doi.org/10.1007/s11518-017-5338-4

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  • DOI: https://doi.org/10.1007/s11518-017-5338-4

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