Analysis of Carbon Emission Reduction in a Dual-Channel Supply Chain with Cap-And-Trade Regulation and Low-Carbon Preference

Xiaoyan Wang, Minggao Xue and Lu Xing
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Xiaoyan Wang: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
Minggao Xue: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
Lu Xing: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China

Sustainability, 2018, vol. 10, issue 3, 1-18

Abstract: This paper focuses on the reduction of carbon emissions driven by cap-and-trade regulation and consumers’ low-carbon preference in a dual-channel supply chain. Under the low-carbon environment, we also discuss the pricing strategies and the profits for the supply chain members using the Stackelberg game model in two cases. In the first (second) case where the initial proportion of consumers who prefer the online direct channel (traditional retail channel) is “larger”, the direct sale price of low-carbon products could be set higher than (equal to) the wholesale price. And it is shown that in both cases, tighter cap-and-trade regulation and higher low-carbon preference stimulate the manufacturer to cut carbon emissions in its production process. However, improving consumers’ low-carbon preference is more acceptable to the supply chain members. It always benefits the manufacturer and the retailer. In comparison, the firm’s profit increases with carbon price only when the clean production level is relatively high. Our findings can provide useful managerial insights for policy-makers and firms in the development of low-carbon sustainability.

Keywords: dual-channel supply chain; channel preference; cap-and-trade; low-carbon preference; carbon emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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