Effective carbon responsibility allocation in construction supply chain under the carbon trading policy

Bing Wang, Linna Geng and Vivian W.Y. Tam

Energy, 2025, vol. 319, issue C

Abstract: The construction industry, a significant contributor to greenhouse gas emissions, is increasingly regulated by carbon emission trading system (ETS) policies across its supply chain. A pivotal consideration is carbon responsibility allocation (CRA) among stakeholders, which critically influences the efficacy of the sector's carbon reductions. This paper investigated three CRA principles between suppliers and building owners. Focusing on their impacts for optimal product price and carbon reduction in a competitive market. Key findings have been uncovered. Firstly, when supplier assumes full carbon responsibility, the optimal price of product is highest and correlates positively with the product's carbon emission levels. Conversely, when building owner assumes full responsibility or shared responsibility, the product price tends to decrease with escalating carbon emission levels of the product. Secondly, an analysis of suppliers' profit revealed divergent preferences with different CRA principles, especially when building owners have low carbon sensitivity. Thirdly, the effective domain of CRA principles is influenced by key factors, i.e., building owner's carbon sensitivity, product competition, product's carbon emission and carbon price. These findings enrich the existing body of knowledge on carbon reduction in the construction supply chain under the carbon trading policies and offer strategic guidance for effective carbon reduction of different CRA principles.

Keywords: Construction supply chain; Carbon trading policy; Carbon responsibility allocation (CRA); Carbon reduction (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:319:y:2025:i:c:s0360544225007017

DOI: 10.1016/j.energy.2025.135059

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