Risk management for sulfur dioxide abatement under multiple uncertainties

C. DAI, W. SUN, Q. TAN, Y. LIU, W.T. LU, H.C. GUO

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Front. Earth Sci. ›› 2016, Vol. 10 ›› Issue (1) : 87-107. DOI: 10.1007/s11707-015-0495-6
RESEARCH ARTICLE
RESEARCH ARTICLE

Risk management for sulfur dioxide abatement under multiple uncertainties

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Abstract

In this study, interval-parameter programming, two-stage stochastic programming (TSP), and conditional value-at-risk (CVaR) were incorporated into a general optimization framework, leading to an interval-parameter CVaR-based two-stage programming (ICTP) method. The ICTP method had several advantages: (i) its objective function simultaneously took expected cost and risk cost into consideration, and also used discrete random variables and discrete intervals to reflect uncertain properties; (ii) it quantitatively evaluated the right tail of distributions of random variables which could better calculate the risk of violated environmental standards; (iii) it was useful for helping decision makers to analyze the trade-offs between cost and risk; and (iv) it was effective to penalize the second-stage costs, as well as to capture the notion of risk in stochastic programming. The developed model was applied to sulfur dioxide abatement in an air quality management system. The results indicated that the ICTP method could be used for generating a series of air quality management schemes under different risk-aversion levels, for identifying desired air quality management strategies for decision makers, and for considering a proper balance between system economy and environmental quality.

Keywords

risk management / conditional value-at-risk / interval optimization / two-stage programming / uncertainty / air quality management

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C. DAI, W. SUN, Q. TAN, Y. LIU, W.T. LU, H.C. GUO. Risk management for sulfur dioxide abatement under multiple uncertainties. Front. Earth Sci., 2016, 10(1): 87‒107 https://doi.org/10.1007/s11707-015-0495-6

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Acknowledgments

This research was supported by the National Key Basic Research Development Planning Project (No. 2010CB428501), and the National High Technology Research and Development Program (No. 2008AA06A415 and 2009AA06A41802). Also, the authors are grateful to the editors and the anonymous reviewers for their insightful comments and suggestions.

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2014 Higher Education Press and Springer-Verlag Berlin Heidelberg
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