Emission-dependent supply chain and environment-policy-making in the ‘cap-and-trade’ system

Shaofu Du, Lili Zhu, Liang Liang and Fang Ma

Energy Policy, 2013, vol. 57, issue C, 61-67

Abstract: The paper focuses on a so-called emission-dependent supply chain consisting of one single emission-dependent manufacturer and one single emission permit supplier in the ‘cap-and-trade’ system, where emission permit becomes requisite for production. We consider the emission cap of emission-dependent manufacturer allocated by the government as a kind of environmental policy and formally investigate its influence on decision-makings within the concerned emission-dependent supply chain as well as distribution fairness in social welfare. It is proved that the system-wide and the manufacturer's profits increase with the emission cap while the permit supplier's decreases. There is room for manufacturer and permit supplier to coordinate the supply chain to get more profit in a certain condition.

Keywords: Cap-and-trade; Emission cap; Emission-dependent supply chain (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (57)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:57:y:2013:i:c:p:61-67

DOI: 10.1016/j.enpol.2012.09.042

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