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

Wen-Hsien Tsai () and Wei-Hong Lin
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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

Sustainability, 2024, vol. 16, issue 6, 1-22

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.

Keywords: cement industry; green economy; circular economy; carbon emissions; carbon tax; cap; and trade; carbon credit; activity-based costing (ABC); mathematical programming; theory of constraints (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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