Greenhouse gas emission liberalization considering the heterogeneity of companies and interactions between technology adoption strategies and business strategies

Jafari, Ali; Sadeghzadeh, Mehdi; Zand Hesami, Hesam

doi:10.22075/ijnaa.2024.32783.4872

Greenhouse gas emission liberalization considering the heterogeneity of companies and interactions between technology adoption strategies and business strategies

Articles in Press

Document Type : Research Paper

Authors

Ali Jafari ¹

Mehdi Sadeghzadeh ²

Hesam Zand Hesami ³

¹ Ph.D. student in the field of information technology management, information technology service development, Islamic Azad University, science and research department

² service development, Islamic Azad University, science and research department,

³ Assistant Professor, Islamic Azad University, Science and Research Department, Tehran

10.22075/ijnaa.2024.32783.4872

Abstract

Corporations are the main entities that trade in carbon reduction and allowances. Due to the heterogeneity of the initial inventory of technologies, the reduction costs of the companies are different, and as a result, the reduction activities and the carbon price dynamics are different. Many studies related to the ETS link pay little attention to firms' behaviors, especially the interactions between firms' technology adoption strategies and their subsidy trading strategies. Furthermore, whether the ETS link can reduce carbon emissions with lower system costs has not yet been sufficiently investigated. This study develops an agent-based model (ABM) to investigate the linkage effect of two emissions trading systems, taking into account firm heterogeneities and interactions between technology adoption strategies and allowance trading strategies. This model considers two GHG emissions trading systems, each of which includes energy service providers that are heterogeneous in scale of production and initial inventory of technologies (thus with different abatement costs), and attempts to determine, by making a decision, the total cost minimize for a given output.

Keywords

greenhouse gas emissions

technology adoption

business strategies

factor modeling