Tactical supply chain planning under a carbon tax policy scheme: A case study

Abstract

Greenhouse gas emissions are receiving greater scrutiny in many countries due to international forces to reduce anthropogenic global climate change. Industry and their supply chains represent a major source of these anthropogenic emissions. This paper presents a tactical supply chain planning model that integrates economic and carbon emission objectives under a carbon tax policy scheme. A modified Cross-Entropy solution method is adopted to solve the proposed nonlinear supply chain planning model. Numerical experiments are completed utilizing data from an actual organization in Australia where a carbon tax is in operation. The analyses of the numerical results provide important organizational and policy insights on (1) the financial and emissions reduction impacts of a carbon tax at the tactical planning level, (2) the use of cost/emission tradeoff analysis for making informed decisions on investments, (3) the way to price carbon for maximum environmental returns per dollar increase in supply chain cost.

Green supply chain network design with stochastic demand and carbon price

“…For example, the effectiveness of carbon tax and emissions trading schemes on the forward operations of the supply chain have been investigated by Fahimnia et al (2014Fahimnia et al ( , 2015a and Zakeri et al (2015). Carbon taxing impacts on the forward and reverse operations of a closed-loop supply chain have also been studied by Fahimnia et al (2013).…”

Low carbon warehouse management under cap-and-trade policy

“…In addition, Fahimnia et al (2015) argued that instead of choosing between carbon tax and cap-and-trade system, a hybrid regulatory scheme can be investigated, and suggested that developing and comparing deterministic versus stochastic modeling efforts can examine the differences in these types of policies. Another future extension of this could be to analyse the green/low carbon warehouse management under a combination of different carbon emissions control policies, and discuss their effects on warehouse decisions and performances.…”

Joint strategic and tactical planning under the dynamics of a cap-and-trade scheme

“…Zhang and Xu (2013) studied a singleperiod, multi-item production planning subject to a capand-trade mechanism. Later on, Fahimnia et al (2015) characterized production and allocation strategies for a carbon tax scheme. They determined insights into the carbon pricing strategy.…”