Advancing Decarbonization Efforts in the Glass Manufacturing Industry through Mathematical Optimization and Management Accounting

Abstract

This study explores the integration of activity-based costing (ABC) and the theory of constraints (TOC) with carbon tax policies to drive decarbonization in the Taiwanese glass industry. Employing a mathematical programming approach, four distinct models are developed to assess the impact of different carbon tax structures, carbon trading mechanisms, and recycled material utilization on corporate profitability and carbon emissions. The findings reveal that strategically applying ABC and the TOC with well-designed carbon tax policies can effectively incentivize emission reduction while maintaining industrial competitiveness. The models incorporating carbon trading and tax allowances demonstrate the potential for creating win–win situations, where companies can increase profitability by investing in cleaner technologies and processes. This study contributes to the literature on sustainable manufacturing and provides actionable insights for policymakers and industry leaders seeking to implement effective carbon pricing mechanisms that drive economic growth and environmental sustainability in tandem.