Ana Gessa Perera

A new approach to the valuation of production investments with environmental effects

Firms are increasingly aware of environmental degradation and this has led many of them to include “quality, safety and protecting the environment” among their competitive priorities. This also involves large capital investments aimed at reducing the environmental impact of their manufacturing activities. This study suggests a method for estimating the return of manufacturing investments with environmental effects (costs and benefits). It considers the value of the asset being preserved as a consequence of a firm’s social responsibility. The practical case studied is Huelva’s industrial area.

OPTIMIZACIÓN DE LA PRODUCCIÓN DESDE UNA PERSPECTIVA SOSTENIBLE

ABSTRACT: This work analyzes some implications of environmental constraints on production planning since the entry into force of the Kyoto Protocol. Under an integrated approach we apply a linear programming model that reflects the company productive limitations to obtain the optimal output mix that maximizes profit, including CO2 emissions constraints. To illustrate the application of the model an example has been applied to one of the sectors affected. The information provided by the optimal program has been differentiated whether the optimal program involves the total or partial consumption of emission allowances available and whether included in the model the estimated market price of emission allowances. The results obtained showed that the model used is sensitive to the variation of the parameters considered, highlighting the role that the emissions allowances available and the price of them in CO2 emissions market. Also, the sensitivity analysis allowed us to show the effect of variations in the parameters considered in the model on the production plan. Key Words: production planning, linear programming, environmental management, Protocol Kyoto, CO2 emissions, emission allowances

LA PLANIFICACIÓN DE LA PRODUCCION INDUSTRIAL Y LAS EMISIONES DE CO2. IMPLICACIONES DEL PROTOCOLO DE KIOTO.

The European Emissions Trading Scheme (EETS) is regulated by the Kyoto Protocol and involves some changes in the corporate management of the industrial companies affected by Directive 2003/87/EC. The EETS is forcing to change the industrial strategic and operational approaches. In this paper we analyze the companies’ available alternative to plan their production. The CO2 emissions are no longer regarded as a waste into another input in the production process. A linear programming model is used to compute a production programme to maximize corporate profits. Therefore, the model gets us important information on possible actions by the company in relation to the purchase or sale of emission allowances in the emissions market CO2. This study compares the actual emissions from the production process, with the allowed emissions, determines the theoretical maximum value to pay for an emissions permit in addition and shows processes or products that are no longer competitive because of the limited CO2 emissions. In this way the Kyoto Protocol is an opportunity to modernize the production system into a model of sustainable production and consumption. The proposed model have been applied to the cement industry.