Irrational Carbon Emission Transfers in Supply Chains under Environmental Regulation: Identification and Optimization

Licheng Sun and Sui Fang
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Licheng Sun: School of Management, Jiangsu University, Zhenjiang 212013, China
Sui Fang: School of Management, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2022, vol. 14, issue 3, 1-20

Abstract: Irrational transfer of carbon emissions in the supply chain refers to the phenomenon that after the transfer of carbon emissions occurs, the profits of any party in the supply chain are reduced compared to before the transfer. Identifying and optimizing irrational transfers of carbon emissions in supply chains under environmental regulation are the bases for establishing green supply chains. By constructing a manufacturer-led Steinberg model, we obtained identification intervals for such transfers, then analyzed the influences of the changes in various coefficients. Finally, we designed a carbon emission transfer cost-sharing contract to obtain optimized intervals for shifts from irrational to rational transfers and used a Nash bargaining model to obtain the optimal share rates within the intervals. The results indicated irrational transfer intervals existed in supply chains. When a supplier has a low ability to receive transfers, the range of the irrational transfer intervals increases as the supplier’s capacity coefficient for receiving carbon emission transfers, the transfer investment cost coefficient, the emission reduction investment cost coefficient, and the consumer’s low-carbon awareness intensity increase. Otherwise, the range decreases as these coefficients increase when the supplier’s ability to receive transfers has a large coefficient. In this range, a cost-sharing contract can effectively shift the transfers from irrational to rational and an optimal cost-sharing ratio can help the transfers reach the optimal level, which is beneficial in terms of constructing a green supply chain.

Keywords: supply chain; irrational carbon emission transfers; cost-sharing contract; Steinberg game model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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