Sustainable Decision Model for Circular Economy towards Net Zero Emissions under Industry 4.0

Abstract

The world produces more than 20 billion pairs of shoes every year, and the greenhouse gas emissions of the shoe industry account for 1.4% of the world. This research, taking the knitted footwear industry as an example, combines the concepts of mathematical programming and carbon emissions to discuss the impact of a circular economy sustainable decision-making model (including four carbon tax functions) to achieve net zero emissions under Industry 4.0 on company profits and product structure. The findings suggest that using activity-based costing to measure the attribution of various costs during process improvement allows companies to more accurately capture the carbon cost of producing each pair of shoes. In addition, under the trend of global efforts to reduce carbon emissions, if the price of carbon taxes or carbon rights is not enough to affect companies’ profits, companies will not pay attention to the impact of carbon emissions. To ensure a sustainable production model, the shoe industry should work with brand customers to reduce the effects of products on the environment, coordinate with brand customers’ sustainable development milestones, and formulate a carbon reduction path to achieve zero carbon emission growth goals. Future research can apply these research models, incorporating the carbon tax and carbon rights proposed by this paper to the other industries. In addition, the research also can be extended to explore the consumer behavior for the newly developed knitted footwear.