Abstract:
Global warming and subsequent climate change have been identified as critical
global issues which need urgent and close attention. Nevertheless, addressing this has
become a problem due to the direct relationship between development and
greenhouse gas (GHG) emissions. However, with the introduction of Paris
agreement, countries are trying to reduce GHG emission by using various emission
reduction policy instruments. Price based emission reduction instruments are deemed
to be effective in achieving emission reductions, as they induce emission reductions
through price signals, and also generate revenues which can later be used. Carbon tax
systems and emission trading schemes are identified as the most popular pricing
instruments. However, implementation of carbon pricing instruments in not that
common seen. Hence, this research focuses on identifying the applicability of carbon
pricing instruments to reduce GHG emissions in apparel sector, which is also a
highly energy intensive sector in Sri Lanka. Data collection was done through semistructured
interviews and questionnaires. Data collected through questionnaire
survey was analysed using Fuzzy Extended Analytic Hierarchy Process (FEAHP),
while data collected through interviews were analysed through content analysis. A
preliminary survey was done to validate literature findings, which was used in the
questionnaire. Questionnaire survey was conducted to evaluate the response of
apparel firms to carbon pricing instruments. When evaluating the response of firms,
the importance given by firms to decision alternatives was analysed using FEAHP.
Accordingly, investing in new technologies was found as the most important
decision alternative for apparel firms with an importance weight of 0.24, while
shifting cost to customers was found as the decision alternative with lowest
importance with a weight of 0.17. From the expert interviews, it was found that the
carbon pricing revenue should be used to programmes which targets emission
reductions. Further, the expert interviews revealed that there could be barriers at
organization level, sector level and national level when implementing a carbon
pricing instrument. Hence, it was found that the necessary steps should be taken at all
those three levels to overcome the barriers and implement a lasting carbon pricing
instrument which is capable of achieving emission reductions.
