No abstract

Due to growing awareness about environmental issues, consumers are becoming more likely to purchase environmentally friendly products that involve lower carbon emissions (CE). Environmental regulations are being enforced and lower-carbon products are being produced in order to maintain competitiveness when complying with such regulations. This paper aims to explore the effect of CE on profit through three kinds of models using the activity-based costing (ABC) approach. The results indicate that governmental policy makers can effectively decrease CE by Total Quantity Control (TQC) to resolve problems of environmental degradation. Governmental policy makers can control CE by limiting the quantities of CE, thereby forcing manufacturers to decrease CE during production. Furthermore, policy makers can set up regulations on CE quotas to control CE well instead of imposing carbon taxes. Therefore, manufacturers will try their best to find methods of improving production processes, equipment, and/or materials to decrease the CE quantity and achieve maximum profit under the restricted carbon emissions quotas.However, traditional management accounting considers environmental costs as normal overhead costs, and manufacturers have no interest in addressing issues relevant to the environment [14], such as the carbon emissions cost (CEC). Various industries have used the activity-based costing (ABC) approach to accurately estimate production costs alongside environmental costs, including industries such as construction, DRAM, tourism, automotive, aviation,. Furthermore, the ABC approach has been used to estimate environmental cost and to evaluate the impact on profit of carbon emissions, Volatile Organic Compounds (VOCs) emissions, coal ash, sludge and waste residue in the models [17,18,20,21]. However, there are few studies that use the ABC approach in the footwear industry to resolve problems of cost and the environment. Therefore, this study utilized the ABC approach to accurately estimate the effect of CE.Moreover, previous researchers did not considered the possibility of purchasing carbon rights to get a larger CE allowance for production, but only considered carbon tax (CT) in their models when using the ABC approach to estimate CEC [17,[21][22][23]. For this reason, the models in this study discussed the effect of CE on profit through three kinds of situations. We incorporated the concept of cap-and-trade (CAT), in which companies have a limited number of permits for carbon emissions allocated from the government. The companies are required to hold permits in an amount equal to their emissions; otherwise they need to buy carbon rights (CR) from the market.In this paper, we assume that the company has a CE quota allocated from the government. Carbon emissions allocation is a fundamental method of carbon emissions reduction through government policy. Zhou and Wang [24] classified the allocation method into four approaches through a comprehensive literature review: (1) Indicator approach: the carbon emissions allocation i...