Developing a Decision-Making Framework for Carbon: Incorporating Carbon into Optimized Business Objectives
Name
wyler-paigew-mba-mgt-2022-thesis.pdf
Description
Thesis PDF
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2.81 MB
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Adobe PDF
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672ceecf99c4df3d4fcb4891c1aa5c5a
Author(s)
Wyler, Paige
Advisor(s)
Graves, Stephen C.
Zheng, Y. Karen
Date Issued
May 2022
Publisher
Massachusetts Institute of Technology
Abstract
Carbon emission reductions have been at the center of decision-making for companies across industries, particularly in automotive. As electric vehicles are introduced to the market, there is a large potential for reducing emissions associated with transportation. However, the process to build and use these vehicles is itself carbon intensive.
This thesis explores mechanisms to enable effective decision-making to meet carbon reduction goals. Carbon accounting is a new concept for most original equipment manufacturers, and they lack a framework for weighing the importance of carbon alongside competing business objectives. Additionally, most mechanisms used in other industries require a high level of data availability and knowledge management that may not exist in a dynamic, fast-growing company launching its first products.
In this thesis, we test carbon decision-making mechanisms in a high-growth business environment. A framework is developed for carbon decision-making, and the use of a carbon price is tested for specific business use cases by adding this cost to the objective function of a cost-optimized battery storage system. Using the results from these use cases, recommendations are made for applying carbon pricing to future decisions as knowledge management infrastructure evolves. This work provides a model for decision-making in a high-growth environment and creates clear conditions under which carbon pricing can effectively impact decisions.
MIT Department
Massachusetts Institute of Technology. Operations Research Center
Sloan School of Management
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