IDEAS home Printed from https://ideas.repec.org/p/sce/scecfa/322.html
   My bibliography  Save this paper

Optimal Endogenous Carbon Taxes for Electric Power Supply Chains with Power Plants

Author

Listed:
  • Zugang Liu

    (University of Massachusetts)

  • Trisha Woolley

    (University of Massachusetts)

  • Anna Nagurney

    (Harvard University and University of Massachusetts Amherst)

Abstract

In this paper, we develop a modelling and computational framework that allows for the determination of optimal carbon taxes applied to electric power plants in the context of electric power supply chain (generation/distribution/consumption) networks. The adoption of carbon/pollution taxes both internationally and regionally has been fuelled by global climate change and fuel security risks with a significant portion of such policy interventions directed at the electric power industry. The general framework that we develop allows for three distinct types of carbon taxation environmental policies, beginning with a completely ecentralized scheme in which taxes can be applied to each individual power generator/power plant in order to guarantee that each assigned emission bound is not exceeded, to two versions of a centralized scheme, one which assumes a fixed bound over the entire electric power supply chain in terms of total carbon emissions and the other which allows the bound to be a function of the tax. The behavior of the various decision-makers in the electric power supply chain network is described, along with the three taxation schemes, and the governing equilibrium conditions, which are formulated as finite-dimensional variational inequality problems. Twelve numerical examples are presented in which the optimal carbon taxes, as well as the equilibrium electric power flows and demands, are computed. The numerical results demonstrate, as the theory predicts, that the carbon taxes achieve the desired goal,in that the imposed bounds on the carbon emissions are not exceeded. Moreover, they illustrate the spectrum of scenarios that can be explored in terms of changes in he bounds on the carbon emissions; changes in emission factors; changes in the demand price functions, etc.

Suggested Citation

  • Zugang Liu & Trisha Woolley & Anna Nagurney, 2006. "Optimal Endogenous Carbon Taxes for Electric Power Supply Chains with Power Plants," Computing in Economics and Finance 2006 322, Society for Computational Economics.
    • Handle: RePEc:sce:scecfa:322
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhitao Xu & Adel Elomri & Shaligram Pokharel & Fatih Mutlu, 2019. "The Design of Green Supply Chains under Carbon Policies: A Literature Review of Quantitative Models," Sustainability, MDPI, vol. 11(11), pages 1-20, May.
    2. Hadi Mokhtari & Mohammad Taghi Rezvan, 2020. "A single-supplier, multi-buyer, multi-product VMI production-inventory system under partial backordering," Operational Research, Springer, vol. 20(1), pages 37-57, March.
    3. Yu-Hong Cao & Jian-Xin You & Hu-Chen Liu, 2017. "Optimal Environmental Regulation Intensity of Manufacturing Technology Innovation in View of Pollution Heterogeneity," Sustainability, MDPI, vol. 9(7), pages 1-14, July.
    4. Chaabane, A. & Ramudhin, A. & Paquet, M., 2012. "Design of sustainable supply chains under the emission trading scheme," International Journal of Production Economics, Elsevier, vol. 135(1), pages 37-49.
    5. Sadegheih, A., 2010. "A novel formulation of carbon emissions costs for optimal design configuration of system transmission planning," Renewable Energy, Elsevier, vol. 35(5), pages 1091-1097.
    6. Tsao, Yu-Chung & Vu, Thuy-Linh, 2019. "Power supply chain network design problem for smart grid considering differential pricing and buy-back policies," Energy Economics, Elsevier, vol. 81(C), pages 493-502.
    7. Zhang, Dongjie & Ma, Linwei & Liu, Pei & Zhang, Lili & Li, Zheng, 2012. "A multi-period superstructure optimisation model for the optimal planning of China's power sector considering carbon dioxide mitigation," Energy Policy, Elsevier, vol. 41(C), pages 173-183.
    8. Xiaowei Hu & Peng Li, 2021. "Relief and Stimulus in A Cross-sector Multi-product Scarce Resource Supply Chain Network," Papers 2101.09373, arXiv.org, revised Nov 2022.
    9. Longfei He & Qinxu Gu & Junsong Bian & Kin Keung Lai & Xiao Zhang, 2023. "To Pool or Not to Pool in Carbon Quotas: Analyses of Emission Regulation and Operations in Supply Chain Supernetwork under Cap-and-Trade Policy," Annals of Operations Research, Springer, vol. 324(1), pages 311-353, May.
    10. Hosseini-Motlagh, Seyyed-Mahdi & Samani, Mohammad Reza Ghatreh & Shahbazbegian, Vahid, 2020. "Innovative strategy to design a mixed resilient-sustainable electricity supply chain network under uncertainty," Applied Energy, Elsevier, vol. 280(C).
    11. Hafezalkotob, Ashkan, 2017. "Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 228-250.
    12. Saglam, Ismail, 2023. "The Optimal Antitrust Policies for Vertical Price Restraints in a Non-Green Supply Chain," MPRA Paper 117587, University Library of Munich, Germany.
    13. Tao, Zhang Gui & Guang, Zhong Yong & Hao, Sun & Song, Hu Jin & Xin, Dai Geng, 2015. "Multi-period closed-loop supply chain network equilibrium with carbon emission constraints," Resources, Conservation & Recycling, Elsevier, vol. 104(PB), pages 354-365.
    14. Nagurney, Anna & Yu, Min, 2012. "Sustainable fashion supply chain management under oligopolistic competition and brand differentiation," International Journal of Production Economics, Elsevier, vol. 135(2), pages 532-540.
    15. Bandar Alkhayyal, 2019. "Corporate Social Responsibility Practices in the U.S.: Using Reverse Supply Chain Network Design and Optimization Considering Carbon Cost," Sustainability, MDPI, vol. 11(7), pages 1-22, April.
    16. Sadegheih, A., 2011. "Optimal design methodologies under the carbon emission trading program using MIP, GA, SA, and TS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 504-513, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sce:scecfa:322. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/sceeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.