Economic-Environment Equilibrium Strategy Based Production Quota Allocation Towards Coal Industry Structure Optimization: Case Study from China

Abstract

As the main subject in China’s energy, coal production layout optimization is an essential part of China’s sustainable energy development. This paper presents a coal production quota allocation mechanism based on a comprehensive consideration of the economic, environment concerns at the colliery level to address the China’s irrational production layout problems. A multi-objective optimization quota allocation model based on equilibrium strategy is established for the decision makers, in which the economic concerns are measured by income and fixed operating costs, the environment concerns assessed based on the waste water, solid waste and air pollution caused by coal mining. By introducing a membership function method, the model is transformed into its equivalent single form and solved using LINGO software. To prove the practically of the model, a case analysis was conducted. The results indicated that due to the regional heterogeneity in terms of financial situation, environment protection, and the technique level among multiple collieries, the allocation ratio of each collieries is quite different. Sensitivity analysis was implemented under different parameters for the authority preferences, it was found that considering the economic, environment objectives, the larger and higher-efficiency collieries should take on additional coal production tasks compared with the smaller and lower-efficiency collieries, and the internal consistency of the model has been verified.