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There is a growing consensus that the increase in greenhouse gases results in unfavorable changes to the Earth's climate and is responsible for global warming. Due to this ecological imbalance, governments are under growing pressure to enact strict legislation to control these emissions in their respective countries. Consumers also demand eco-friendly products and are moving toward firms that are socially and environmentally responsible. Therefore, industries are facing increased pressure to adopt sustainable production approaches. This paper demonstrates how a mixed integer linear program can be used to optimize the balance of overall cost and carbon emissions in the production, storage, and distribution of products in a regulatory environment that includes a cap and trade policy. The model is computationally tested for fifteen case instances of different sizes. The main contributions of the proposed model are (a) to link the emission parameters to various decision variables to support the decision making related to carbon costs and carbon emissions, (b) to address international trade issues by considering international parameters such as imports, exports, and government subsidies and perform a country-specific analysis for carbon emissions, and (c) to identify the extent to which the operational adjustment can be used as an alternative to the costly investment in carbon reduction technologies to reduce emissions.

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