Carbon emissions reduction and transfer in supply chains under A cap-and-trade system with emissions-sensitive demand

Abstract

Although 'Cap-and-trade' mainly constrains the manufacturer, the decision of the manufacturer's emission reduction will affect the decision of the whole supply chain. In this paper, we investigate manufacturer and retailer's decision under decentralized decision and centralized decision and taking into account the impact of carbon price and consumer environmental consciousness. Specially, we analyse the condition of whether a manufacturer transfers the emission reduction task to retailer. Besides, we use computational experiments to analyse the sensitivity by changing the cost function. Through the research, we have some findings: under a decentralized decision, manufacturer transfers emissions reduction task in more times, if the manufacturer transfers the emissions reduction task, the effectiveness of the emissions reduction, demand, retailer's revenue per product and consumer welfare decrease. Under centralized decision, the manufacturer does not transfer emissions reduction task all time, which is affected by emissions reduction cost of the manufacturer and retailer, carbon price and consumer environmental consciousness. In addition, emissions reduction cost function is not the sensitivity factor.

A Bilevel Model for Carbon Pricing in a Green Supply Chain Considering Price and Carbon-Sensitive Demand

“…Yunlong Liu [36] conducted a research study examining the decisions of manufacturers and retailers under a decentralized decision-making system and a centralized decision-making system, considering the impact of carbon pricing and consumer environmental awareness. Their model includes three characteristics of a low-carbon supply chain: consumer environmental awareness, which compels the producer to reduce emissions; emission reduction, leading to increased demand and higher profits for retailers; and greenhouse gas emissions from transportation being a significant part of the product life cycle.…”

Non-Cooperative Game and Cooperative Operation of Multi-Level Supply Chain Under Background of Carbon Emission Reduction

“…The emission reduction performance for supply chain members in both singlechannel and exclusive dual-channel cases were investigated [4][5]. Some researchers investigated manufacturer and retailer decision under decentralized decision and centralized decision and taking into account the impact of carbon price, inventory related costs, recovery times and conscious decisions [6][7]. Xiang et al [8] proposed differential game models for the joint carbon emission reduction in a three-echelon supply chain.…”