Pricing and Low-Carbon Investment Decisions in an Emission Dependent Supply Chain under a Carbon Labelling Scheme

Yonghong Cheng, Hui Sun, Fu Jia and Lenny Koh
Additional contact information
Yonghong Cheng: School of Management Engineering, Anhui Polytechnic University, Wuhu 241000, China
Hui Sun: Management School, University of Sheffield, Sheffield S10 1FL, UK
Fu Jia: Ocean College, Minjiang University, Fuzhou 350108, China
Lenny Koh: Management School, University of Sheffield, Sheffield S10 1FL, UK

Sustainability, 2018, vol. 10, issue 4, 1-17

Abstract: A low-carbon policy attracts the interests of businesses, consumers, and policy makers. The purpose of this paper is to investigate how a carbon labelling scheme could be integrated into operational decision-making for manufacturers and retailers. Three game theoretic models of a supply chain with one manufacturer and one retailer are built to investigate a manufacturer and retailer’s pricing and investment decision for products with different initial carbon footprints considering consumer environmental awareness. Through a systematic comparison and numerical analysis, the results show that a carbon labelling scheme can significantly reduce the overall carbon emission supply chain and have an initially negative impact on the manufacturer and retailer’s profits. However, in the medium–long run, manufacturers and retailers could yet achieve profitability through continuously investing in low-carbon technology.

Keywords: carbon labelling scheme; supply chain; product carbon footprint (PCF); consumer environmental awareness; game theory (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 (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/10/4/1238/pdf (application/pdf)
https://www.mdpi.com/2071-1050/10/4/1238/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:4:p:1238-:d:141773

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().