A Study on Multi-Period Production Decision Models with Carbon Taxes and Csr Rights Purchase Costs(2/2)

United Nations has established regulations for reducing Green House Gas (GHG) emission since environmental protection problem has been received considerable attentions in recent decades. The purpose of the progress from Kyoto Protocol (1997) to Paris Agreement (2015) is to protect our earth not to be deteriorated continuously. However, although countries around the world have made commitments to the Paris Agreement, the increase in the concentration of carbon dioxide in the global atmosphere was higher than the average annual increase in the past ten years. As a result, the Oxford Dictionary lists Climate Emergency as the Word of the Year 2019. There are many ways to solve climate emergency. The carbon tax system and the carbon rights trading system are two methods to reduce carbon emissions. The carbon tax system is formulated by the government to levy taxes based on the amount of carbon emitted by enterprises. Under overall carbon reduction target, the country will allocate carbon caps for companies through mechanisms. Enterprises striving to reduce emissions can sell their unused carbon emissions to companies with insufficient carbon emissions, forming a carbon rights trading market. This study assumes that the country's total carbon emissions will be reduced year by year under overall long-term carbon reduction goals, so the carbon emissions allocated to companies will be reduced year by year. Therefore, company's production decision should also be determined by multi-period in order to achieve company's profit goals and environmental protection and emission reduction goals. In view of this, this three-year research plan will propose multi-period production decision models that considers carbon taxes and carbon rights costs. (1) In the first year, multi-period production decision models considering carbon taxes and carbon rights costs will be established. The impact of different carbon tax systems on production decisions and profit will be investigated and related sensitivity analysis will be performed. (2) In the second year, multi-period production decision models considering carbon tax and carbon rights costs will be established. The impact of different carbon rights cost functions on the production decisions and profit will be investigated, and related sensitivity analysis will also be performed. (3) In the third year, with addition of environmental quality costs, multi-period production decision model considering carbon tax and carbon rights purchase costs will be extended from the models of first two years. The impacts of improving environmental quality cost period by period on production decisions and profits will be explored. These include the impact of increasing investments in emissions reduction (e.g., adopting renewable energy or low-carbon energy, low-carbon manufacturing process, carbon capture and storage technique, or carbon recycling) that increase or decrease environmental quality cost elements on the company's production decision and profit. In this three-year plan, the Activity-Based Costing (ABC) will be used to establish the enterprise's activity cost models, and the Mathematical Programming model will be used to establish the ABC production decision models.