Profit allocation of carbon emission reduction in the construction supply chain

Qiang Du (), Hongyu Zhu (), Youdan Huang (), Qiaoyu Pang () and Jinzhao Shi ()
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Qiang Du: Chang’ an University
Hongyu Zhu: Chang’ an University
Youdan Huang: Chang’ an University
Qiaoyu Pang: Chang’ an University
Jinzhao Shi: Chang’ an University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 8, No 57, 20560 pages

Abstract: Abstract To respond to the goal of “carbon peaking and carbon neutrality,” reducing carbon emissions in the construction industry is urgent and necessary. A sound profit allocation based on carbon emission reduction is essential to promote low-carbon initiatives implementation by construction supply chain enterprises. In this paper, considering the potential impact of an effective emission reduction scheme (ETS), the Stackelberg game models are established to explore the carbon emission reduction decisions and profit allocation mechanism under decentralized, collaborative and centralized decision-making scenarios between developers and contractors. By conducting a comparative analysis, we obtained insights into the level of enterprises’ carbon emission reduction effort, the profit allocation proportion and the impact of ETS. The main findings can be summarized as follows. (1) The proportion of carbon emission reduction profit allocation in the collaborative scenario is higher than that in the decentralized one. (2) For contractors, carbon emission reduction efforts are the highest in the centralized scenario, followed by the collaborative one. For developers, the carbon emission reduction effort is highest in the centralized scenario, but is followed by the decentralized one. When the carbon emission reduction effectiveness of the contractor is greater than a certain level (about 0.52), the carbon emission reduction volume in the collaborative scenario is larger than that in the decentralized scenario. (3) Total profits are most sensitive to carbon trading prices in the centralized scenario, followed by the collaborative scenario. This research provides valuable reference for the government and construction enterprises to promote carbon emission reduction initiatives and low-carbon development in the construction sector.

Keywords: Profit allocation; Construction supply chain; Emission reduction decisions; Carbon trading policy; Stackelberg game (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03488-3

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