Equilibrium between Environmental and Economic Objectives: An Activity-Based Costing Approach Application for Carbon Emissions Management in the Aluminum Alloy Wheel Industry

Wen-Hsien Tsai, Shuo-Chieh Chang () and Yuchun Teng
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Wen-Hsien Tsai: Department of Business Administration, National Central University, 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan
Shuo-Chieh Chang: Department of Business Administration, National Central University, 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan
Yuchun Teng: Department of Business Administration, National Central University, 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan

Energies, 2024, vol. 17, issue 6, 1-34

Abstract: In the face of the increasingly dire threat of global climate change, reducing carbon emissions has become an urgent priority for governments and corporations worldwide. The aluminum alloy wheel manufacturing industry bears an even heavier burden for emission mitigation due to its high production volume, complex processes, and proportionally higher carbon footprint. With impending carbon taxes and trading policies looming, the industry urgently needs to strike a balance between maximizing profits and minimizing carbon emissions. Leveraging real-world industry data, this research develops four green Activity-Based Costing (ABC) models and utilizes optimization software to compare the following scenarios: non-continuous carbon tax, carbon tax with trading, tiered tax with exemptions, and exemptions combined with trading. Results demonstrate that integrating carbon trading and targeted tax reductions can improve corporate financial positions without severely compromising environmental goals. Although identifying optimal balance points remains a highly complex process, this study equips enterprises and policymakers with quantitative tools to navigate fluctuating carbon regulatory environments. As national policies progress, more multifaceted dynamic carbon tax models will likely provide more profound insights for sustainable development.

Keywords: activity-based costing (ABC); carbon tax; carbon right; carbon pricing; mathematical programming (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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