Grandfathering or benchmarking? The performance of implementing blockchain technology in a low-carbon supply chain

Miaomiao Wang, Jun Wu, Xinyu Chen and Xiaoxi Zhu

Energy, 2023, vol. 284, issue C

Abstract: Blockchain can make the production process transparent and increase consumer recognition. With regard to the grandfathering and benchmarking, which are two widely implemented carbon regulation schemes in the industrial field, how will the use of blockchain perform asymmetric cost effects and emission reduction driving effects on these two carbon policies? From the perspective of carbon reduction and supply chain stakeholders, which regulation scheme should be adopted is an important issue that deserves attention. By analyzing the performances of two carbon allocation mechanisms with and without blockchain, we have the following findings: The implementation of benchmarking mechanism can better stimulate the manufacturer's enthusiasm for emission reduction, and the retailer also prefers benchmarking, regardless of whether the blockchain employed or not; There exists a situation where a higher unit blockchain cost leads to a lower total carbon emission, and unit improvement in environmental performance may not necessarily improve overall environmental performance; We define the Pareto regions in which the interests of supply chain stakeholders and the environmental performance of the supply chain can be improved simultaneously by adopting blockchain. We also investigate the impacts of consumer sensitivity to blockchain technology, carbon reduction cost and carbon trading price on the Pareto regions.

Keywords: Carbon regulation; Grandfathering and benchmarking mechanism; Blockchain technology; Emission reduction strategy (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:284:y:2023:i:c:s0360544223020856

DOI: 10.1016/j.energy.2023.128691

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