Abstract
The main focus of this paper is the optimal control strategy for minimizing carbon emission reduction cost in a company. Due to the existence of the carbon market, the company can purchase carbon allowances in the carbon market to increase its own emission limit, and it will adopt measures in order to decrease its emissions. We build a model with the goal of minimizing the total emissions reduction cost for the company, which involves two random processes. This model can then be transformed into a Hamilton–Jacobi–Bellman (HJB) equation, which is a semi-linear partial differential equation that is spatially two-dimensional. We prove the existence and uniqueness of the classical solution. Finally, some numerical results are shown.
Published Version
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