Dynamic Sustainability Modeling under Energy and Emission Uncertainty: Tools for Resilient Policy and Industrial Decision-Making

Authors

DOI:

https://doi.org/10.61978/catalyx.v2i4.1328

Keywords:

sustainable manufacturing, sensitivity analysis, Monte Carlo simulation, emission factor variability, energy price modeling, policy planning, uncertainty quantification

Abstract

Uncertainty in energy markets and emission factors presents a significant challenge to sustainable manufacturing. This study aims to develop a simulation-based sensitivity framework to assess how variability in fossil fuel prices and emission coefficients impacts sustainability outcomes. Using One-At-a-Time (OAT), Tornado analysis, and Monte Carlo simulations, the study evaluates the influence of energy prices (oil, coal, natural gas) and emission factors (CO₂ per GJ for various fuels) on manufacturing sustainability. The framework incorporates real-world parameter ranges and applies probabilistic modeling to capture compound uncertainties. Sensitivity analysis reveals that coal and oil prices are the most influential variables in cost-driven assessments, while emission factor variation particularly for coal and diesel introduces significant uncertainty in carbon accounting. Monte Carlo simulations, run over 10,000 iterations, show wide variability in sustainability scores, underscoring the need for risk-informed planning. Tornado diagrams visually rank variable importance, facilitating policy and operational prioritization. Contextual influences, such as national energy mixes and regulatory environments, further shape parameter sensitivity. Findings demonstrate the strategic value of compound modeling in subsidy targeting, supply chain planning, and compliance forecasting. This study contributes a practical, adaptable framework for sustainability modeling under uncertainty. By quantifying the probabilistic impact of volatile energy and emissions data, it enhances the credibility and utility of manufacturing assessments. The framework supports policymakers and industry leaders in designing robust, context-specific strategies for sustainable transitions.

References

Alonso, À., Coppitters, D., Martín, H., & Hoz, J. d. l. (2023). Economic and Regulatory Uncertainty in Renewable Energy System Design: A Review. Energies, 16(2), 882. https://doi.org/10.3390/en16020882 DOI: https://doi.org/10.3390/en16020882

Bamber, N., Turner, I., Arulnathan, V., Li, Y., Zargar, S., Smart, A., & Pelletier, N. (2019). Comparing Sources and Analysis of Uncertainty in Consequential and Attributional Life Cycle Assessment: Review of Current Practice and Recommendations. The International Journal of Life Cycle Assessment, 25(1), 168–180. https://doi.org/10.1007/s11367-019-01663-1 DOI: https://doi.org/10.1007/s11367-019-01663-1

Baranzini, A., Jeroen C.J.M. van den Bergh, Carattini, S., Howarth, R. B., Padilla, E., & Jusmet, J. R. (2017). Carbon Pricing in Climate Policy: Seven Reasons, Complementary Instruments, and Political Economy Considerations. Wiley Interdisciplinary Reviews Climate Change, 8(4). https://doi.org/10.1002/wcc.462 DOI: https://doi.org/10.1002/wcc.462

Becattini, V., Gabrielli, P., & Mazzotti, M. (2021). Role of Carbon Capture, Storage, and Utilization to Enable a Net-Zero-CO2-Emissions Aviation Sector. Industrial & Engineering Chemistry Research, 60(18), 6848–6862. https://doi.org/10.1021/acs.iecr.0c05392 DOI: https://doi.org/10.1021/acs.iecr.0c05392

Bruninx, K., Ovaere, M., & Delarue, E. (2020). The Long-Term Impact of the Market Stability Reserve on the EU Emission Trading System. Energy Economics, 89, 104746. https://doi.org/10.1016/j.eneco.2020.104746 DOI: https://doi.org/10.1016/j.eneco.2020.104746

Calel, R., & Dechezleprêtre, A. (2016). Environmental Policy and Directed Technological Change: Evidence From the European Carbon Market. The Review of Economics and Statistics, 98(1), 173–191. https://doi.org/10.1162/rest_a_00470 DOI: https://doi.org/10.1162/REST_a_00470

Chu, W., Chai, S., Chen, X., & Du, M. (2020). Does the Impact of Carbon Price Determinants Change With the Different Quantiles of Carbon Prices? Evidence From China ETS Pilots. Sustainability, 12(14), 5581. https://doi.org/10.3390/su12145581 DOI: https://doi.org/10.3390/su12145581

Conflitti, C., & Luciani, M. (2019). Oil Price Pass-Through Into Core Inflation. The Energy Journal, 40(6), 221–248. https://doi.org/10.5547/01956574.40.6.ccon DOI: https://doi.org/10.5547/01956574.40.6.ccon

Dechezleprêtre, A., Gennaioli, C., Martin, R., Muûls, M., & Stoerk, T. (2022). Searching for Carbon Leaks in Multinational Companies. Journal of Environmental Economics and Management, 112, 102601. https://doi.org/10.1016/j.jeem.2021.102601 DOI: https://doi.org/10.1016/j.jeem.2021.102601

Desole, P. L., Waseem, M., Pallonetto, F., & Fahy, A. (2025). Advancing Residential Energy Retrofit Feasibility Analysis: A Probabilistic Application to Ireland’s Housing Stock. E3s Web of Conferences, 654, 01004. https://doi.org/10.1051/e3sconf/202565401004 DOI: https://doi.org/10.1051/e3sconf/202565401004

Flora, M., & Vargiolu, T. (2020). Price Dynamics in the European Union Emissions Trading System and Evaluation of Its Ability to Boost Emission-Related Investment Decisions. European Journal of Operational Research, 280(1), 383–394. https://doi.org/10.1016/j.ejor.2019.07.026 DOI: https://doi.org/10.1016/j.ejor.2019.07.026

Fragkos, P., Fragkiadakis, K., & Paroussos, L. (2021). Reducing the Decarbonisation Cost Burden for EU Energy-Intensive Industries. Energies, 14(1), 236. https://doi.org/10.3390/en14010236 DOI: https://doi.org/10.3390/en14010236

Hemauer, J., Bohn, J.-P., Rehfeldt, S., & Klein, H. (2025). Renewable Methanol Production – What Does It Take? Comparison of Electrolysis-Based and Conventional Methanol Production With Regard to Their Sustainability. Ecs Meeting Abstracts, MA2025-01(26), 1490–1490. https://doi.org/10.1149/ma2025-01261490mtgabs DOI: https://doi.org/10.1149/MA2025-01261490mtgabs

Hjelmeland, M., Zou, J., Helseth, A., & Ahmed, S. (2019). Nonconvex Medium-Term Hydropower Scheduling by Stochastic Dual Dynamic Integer Programming. Ieee Transactions on Sustainable Energy, 10(1), 481–490. https://doi.org/10.1109/tste.2018.2805164 DOI: https://doi.org/10.1109/TSTE.2018.2805164

Landry, C. E., Anderson, S. E., Krasovskaia, E., & Turner, D. (2021). Willingness to Pay for Multi-Peril Hazard Insurance. Land Economics, 97(4), 797–818. https://doi.org/10.3368/le.97.4.072820-0115r1 DOI: https://doi.org/10.3368/le.97.4.072820-0115R1

Li, L., Dong, J., & Song, Y. (2020). Impact and Acting Path of Carbon Emission Trading on Carbon Emission Intensity of Construction Land: Evidence From Pilot Areas in China. Sustainability, 12(19), 7843. https://doi.org/10.3390/su12197843 DOI: https://doi.org/10.3390/su12197843

Mahmood, A., Varabuntoonvit, V., Mungkalasiri, J., Silalertruksa, T., & Gheewala, S. H. (2022). A Tier-Wise Method for Evaluating Uncertainty in Life Cycle Assessment. Sustainability, 14(20), 13400. https://doi.org/10.3390/su142013400 DOI: https://doi.org/10.3390/su142013400

Mari, C., Lucheroni, C., Sinha, N., & Mari, E. (2025). Power System Portfolio Selection and CO2 Emission Management Under Uncertainty Driven by a DNN-Based Stochastic Model. Mathematics, 13(9), 1477. https://doi.org/10.3390/math13091477 DOI: https://doi.org/10.3390/math13091477

Martin, J. L., & Viswanathan, S. (2023). Feasibility of Green Hydrogen-Based Synthetic Fuel as a Carbon Utilization Option: An Economic Analysis. Energies, 16(17), 6399. https://doi.org/10.3390/en16176399 DOI: https://doi.org/10.3390/en16176399

Mirzaei, M. A., Sadeghi‐Yazdankhah, A., Mohammadi‐Ivatloo, B., Marzband, M., Shafie‐khah, M., & Catalào, J. P. S. (2019). Integration of Emerging Resources in IGDT-based Robust Scheduling of Combined Power and Natural Gas Systems Considering Flexible Ramping Products. Energy, 189, 116195. https://doi.org/10.1016/j.energy.2019.116195 DOI: https://doi.org/10.1016/j.energy.2019.116195

Mo, S., & Wang, T. (2022). Synergistic Effects of International Oil Price Fluctuations and Carbon Tax Policies on the Energy–Economy–Environment System in China. International Journal of Environmental Research and Public Health, 19(21), 14177. https://doi.org/10.3390/ijerph192114177 DOI: https://doi.org/10.3390/ijerph192114177

Rosenbloom, D., Markard, J., Geels, F. W., & Fuenfschilling, L. (2020). Why Carbon Pricing Is Not Sufficient to Mitigate Climate Change—And How “Sustainability Transition Policy” Can Help. Proceedings of the National Academy of Sciences, 117(16), 8664–8668. https://doi.org/10.1073/pnas.2004093117 DOI: https://doi.org/10.1073/pnas.2004093117

Rubio, E. V., Huete-Morales, M. D., & Galán-Valdivieso, F. (2023). Using EGARCH Models to Predict Volatility in Unconsolidated Financial Markets: The Case of European Carbon Allowances. Journal of Environmental Studies and Sciences, 13(3), 500–509. https://doi.org/10.1007/s13412-023-00838-5 DOI: https://doi.org/10.1007/s13412-023-00838-5

Usman, O., Özkan, O., Nwani, C., Bekun, F. V., & Alola, A. A. (2025). Can Household Energy Efficiency Dampen Crude Oil Price Volatility in the United States? Plos One, 20(1), e0307840. https://doi.org/10.1371/journal.pone.0307840 DOI: https://doi.org/10.1371/journal.pone.0307840

Xue, K., & Sun, G. (2022). Impacts of Supply Chain Competition on Firms’ Carbon Emission Reduction and Social Welfare Under Cap-and-Trade Regulation. International Journal of Environmental Research and Public Health, 19(6), 3226. https://doi.org/10.3390/ijerph19063226 DOI: https://doi.org/10.3390/ijerph19063226

Yan, G., & Shi, Z. (2024). A Study on the Impact of Pilot Carbon Emission Trading Policies on Corporate Performance. Sustainability, 16(5), 2214. https://doi.org/10.3390/su16052214 DOI: https://doi.org/10.3390/su16052214

Zhang, W., Ji, C., Liu, Y., Hao, Y., Song, Y., Cao, Y., & Qi, H. (2024). Dynamic Interactions of Carbon Trading, Green Certificate Trading, and Electricity Markets: Insights From System Dynamics Modeling. Plos One, 19(6), e0304478. https://doi.org/10.1371/journal.pone.0304478 DOI: https://doi.org/10.1371/journal.pone.0304478

Zwaginga, J., Lagemann, B., Erikstad, S. O., & Pruyn, J. (2024). Optimal Ship Fuel Selection Under Life Cycle Uncertainty. Sustainability, 16(5), 1947. https://doi.org/10.3390/su16051947. DOI: https://doi.org/10.3390/su16051947

Downloads

Published

2025-10-30

How to Cite

Hasan, T. (2025). Dynamic Sustainability Modeling under Energy and Emission Uncertainty: Tools for Resilient Policy and Industrial Decision-Making. Catalyx : Journal of Process Chemistry and Technology, 2(4), 213–222. https://doi.org/10.61978/catalyx.v2i4.1328