Carbon Emissions Cost Analysis with Activity-Based Costing

Due to growing awareness about environmental issues, consumers are becoming more likely to purchase environmentally friendly products that involve lower carbon emissions (CE). Environmental regulations are being enforced and lower-carbon products are being produced in order to maintain competitiveness when complying with such regulations. This paper aims to explore the effect of CE on profit through three kinds of models using the activity-based costing (ABC) approach. The results indicate that governmental policy makers can effectively decrease CE by Total Quantity Control (TQC) to resolve problems of environmental degradation. Governmental policy makers can control CE by limiting the quantities of CE, thereby forcing manufacturers to decrease CE during production. Furthermore, policy makers can set up regulations on CE quotas to control CE well instead of imposing carbon taxes. Therefore, manufacturers will try their best to find methods of improving production processes, equipment, and/or materials to decrease the CE quantity and achieve maximum profit under the restricted carbon emissions quotas.

Offset Ratio Assessment for Volatile Organic Compounds in Cap and Trade Zone

Kaohsiung and Pintung are the first regions were set into action of total quantity control zones for air quality in Taiwan. Cap and trade programs have built for the particle matters (PM10), sulfur oxides (SOx), nitrogen oxides (NOx) and Volatile Organic Compounds (VOCs) in 2010. The offset ratio was designed as 1.0 or 1.2 various on the offset sources. The fixed offset ratio setting is suitable for PM10, SOx, and NOx since their characters are unitary. However, VOCs include a variety of chemicals, some of which may have short- or long-term adverse health effects. Even the same pollutant trading amount cannot guarantee the same health risk or environmental impacts. It would induced the highly uncertainty of air quality for the fixed offset ratio system. This study therefore tried to create a new methodology based on the pollutant impact strength of health and environment for determining the offset ratio of VOCs. An equation for calculating the offset ratio of VOCs was proposed and evaluated by case study. The elasticity of weighting determination was remained to the decision makers for confronting the various environmental improving targets.