A study on supply chain optimization with uncertain demand under the cap-and-trade system

Panpan Li (), Baojun Zhang () and Ying Ji ()
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Panpan Li: University of Shanghai for Science and Technology
Baojun Zhang: Harbin Institute of Technology
Ying Ji: Shanghai University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 7, No 44, 17449-17473

Abstract: Abstract To investigate the spillover effect of information sharing on carbon emissions under a cap-and-trade system, we establish a supply chain (SC) that comprises a manufacturer and a retailer under demand uncertainty. The manufacturer will choose to produce low-carbon products to cater to consumer preferences, while the retailer can predict demand for products based on historical sales data. This article aims to explore whether the retailer’s willingness to share information is affected by carbon reduction efficiency. We focused on the impact of information sharing on SC members’ profits and its spillover effect on carbon emissions. Also, we investigate the SC profits and carbon emissions under centralized decision-making. Through comparative analysis, the following conclusions are obtained: (i) When emission reduction efficiency is high, the manufacturer receives demand information for free. Conversely, when emission reduction efficiency is low, she must offer a payment to the retailer to gain information about demand. (ii) The implementation of an information sharing contract not only increases the SC members’ profits, but also reduces both unit and total carbon emissions, leading to the spillover effect. (iii) The SC can achieve greater profits and lower unit carbon emissions through centralized decision-making.

Keywords: Cap-and-trade system; Uncertain demand; Information sharing; Carbon emissions strategy (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03347-1

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