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

Behnam Fahimnia, Joseph Sarkis, Alok Choudhary and Ali Eshragh

International Journal of Production Economics, 2015, vol. 164, issue C, 206-215

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 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.

Keywords: Green supply chain; Environmental sustainability; Carbon tax policy scheme; Carbon pricing; Cap-and-trade market; Carbon trading; Nested Integrated Cross-Entropy (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (44)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:164:y:2015:i:c:p:206-215

DOI: 10.1016/j.ijpe.2014.12.015

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