On Carbon Tax Effectiveness in Inducing a Clean Technology Transition: An Evaluation Based on Optimal Strategic Capacity Planning

Wolf N, Escalona P, López-Campos M, Angulo A, Weston J (2023)

Publication Type: Journal article

Publication year: 2023

Journal

Sustainability MDPI

Book Volume: 15

Article Number: 11663

Journal Issue: 15

DOI: 10.3390/su151511663

Abstract

This paper studies carbon tax effectiveness in inducing a transition to cleaner production when a firm faces different technologies and demands over a planning horizon. To determine carbon tax effectiveness, we propose a model based on strategic capacity production planning under carbon taxes that considers proper performance measures. The model, which is formulated as a mixed integer linear problem (MILP), considers issues that previous works have not studied jointly, and that are relevant in a technological transition, such as machine replacement, workforce planning, and maintenance. The effectiveness measures consider levels of clean production and periods to reach a technological transition. Our computational experiments, based on a real case, have shown that in the absence of carbon taxes, a firm has no incentive to transition to clean technology. Still, the effectiveness of carbon taxes depends on the characteristics of the technology available for the production process and the magnitude of the demand. We include managerial insights aimed at both companies and the environmental authority.

Authors with CRIS profile

Jorge Weston Fernández Professur für Optimization under Uncertainty & Data Analysis

Involved external institutions

Institut national de Recherche en Informatique et en Automatique (INRIA) FR France (FR) Universidad Técnica Frederico Santa María CL Chile (CL)

How to cite

APA:

Wolf, N., Escalona, P., López-Campos, M., Angulo, A., & Weston, J. (2023). On Carbon Tax Effectiveness in Inducing a Clean Technology Transition: An Evaluation Based on Optimal Strategic Capacity Planning. Sustainability, 15(15). https://dx.doi.org/10.3390/su151511663

MLA:

Wolf, Nathalia, et al. "On Carbon Tax Effectiveness in Inducing a Clean Technology Transition: An Evaluation Based on Optimal Strategic Capacity Planning." Sustainability 15.15 (2023).

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