Leader-follower optimized approach for carbon-economy equilibrium in the municipal solid waste (MSW) incineration indust
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RESEARCH ARTICLE
Leader-follower optimized approach for carbon-economy equilibrium in the municipal solid waste (MSW) incineration industry Jiuping Xu1
· Mengyuan Zhu1,2 · Siwei Zhao3
Received: 21 January 2020 / Accepted: 27 April 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Municipal solid waste (MSW) incineration contributes significantly to carbon emissions, and has become a serious problem in China, which has seen an exponential rise in waste over the last twenty years due to rapid urbanization and the associated consumer economy growth. To tackle this issue, this paper develops a leader-follower optimized approach for economic and environmental equilibrium in incineration power plants that includes a carbon allowance allocation scheme (IPP-CAAS) under combustion and pollutant limitations. In the leader-follower (bi-level) game, the regional authority on the upper level determines the carbon allocations and environmental targets and the IPPs on the lower level develop schemes to maximize revenue under the upper-level restrictions. By employing uncertain parameters for the carbon and power conversion fluctuations, the approach is able to more accurately depict the industry characteristics of waste incineration process in this carbon-economy balance problem. The robustness and practicality of the proposed methodology was then validated through a case study. Scenario analysis under different political parameters indicates that the proposed methodology can assist the authorities to achieve carbon-economy trade-off and under serious carbon-control situations, encourage the IPPs to reduce their blended coal ratios, and invest in low-carbon incineration technology. Managerial insights on further industrial developments are also given for the authority and relevant practitioners. Keywords Municipal solid waste incineration · Carbon emissions mitigation · Leader-follower model
Introduction Municipal solid waste (MSW), defined as the refuse from residential, commercial, institutional, and demolition activities, is mainly comprised of food waste, paper, plastics, glass, textiles, metals, and wood (Sha’Ato et al. 2007). In 2016, the Chinese MSW was 203.62 million tonnes (NBS 2017) and it has been estimated to reach Responsible Editor: Muhammad Shahbaz Jiuping Xu
[email protected] 1
Business School, Sichuan University, Chengdu, 610064, People’s Republic of China
2
M.E. Rinker, Sr. School of Construction Management, University of Florida, P.O. Box 115703, Gainesville, FL 32611, USA
3
College of Landscape Artitecture, Sichuan Agricultural University, Chengdu 611130, People’s Republic of China
around 282 million tonnes by 2020, an annual increase of 8–10% (Wang et al. 2018), and by 2025, China is expected to produce almost one-quarter of the world’s municipal solid waste (Mathews and Tan 2016). The most commonly used disposal method in China has been sanitary landfill (more than 68%), and while this method has low operational difficulty and allows for high waste processing, it cau
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