From carbon compliance to sustainable value creation: A conceptual framework for carbon handprints under carbon pricing

Chuen-Ping Chang; Fu Wei Huang; Jeng-Yan Tsai

doi:10.65921/8hvdkj30

Authors

Chuen-Ping Chang Author
Fu Wei Huang CTBC Business School Author
Jeng-Yan Tsai Author

DOI:

https://doi.org/10.65921/8hvdkj30

Keywords:

Carbon pricing; Carbon handprints; Institutional recognition; Sustainable value creation; Climate policy

Abstract

Environmental regulation is increasingly expected not only to reduce carbon emissions but also to promote sustainable value creation through positive environmental incentives. However, existing studies generally examine carbon pricing, carbon handprints, and sustainable value creation separately, leaving the economic mechanism linking these research streams insufficiently explained. This conceptual paper develops a unified theoretical framework that integrates carbon pricing, recognized carbon handprints, and institutional recognition into firms' production decisions. Using an optimization-based analytical approach, the framework examines how carbon-pricing costs and the recognized economic value of avoided emissions jointly affect firms' optimal production decisions. The analysis shows that institutional recognition transforms avoided emissions into measurable economic value and identifies the threshold at which environmental regulation shifts from a compliance-oriented mechanism toward sustainable value creation. The findings suggest that carbon pricing and carbon handprint recognition can operate as complementary policy instruments. Policymakers may therefore strengthen climate-policy effectiveness by combining carbon-cost internalization with institutional mechanisms that reward positive environmental performance. As a conceptual study, the analysis does not rely on empirical datasets.

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