Contracting Emissions Reduction Supply Chain Based on Market Low-Carbon Preference and Carbon Intensity Constraint

Jiaping Xie (), Jing Li (), Ling Liang, Xu Fang (), Guang Yang () and Lihong Wei ()
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Jiaping Xie: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, P. R. China
Jing Li: College of Business, Shanghai University of Finance and Economics, Shanghai, 200433, P. R. China
Ling Liang: Tourism and Event Management School, Institute of Artificial Intelligence and Change Management, Shanghai University of International Business and Economics, Shanghai, 201620, P. R. China
Xu Fang: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, P. R. China
Guang Yang: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, P. R. China
Lihong Wei: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2020, vol. 37, issue 02, 1-34

Abstract: Carbon emissions reduction has become a frequently discussed topic in industry and academia. However, how can reduction effects be enhanced with dominant brand and downstream manufacturer? This paper incorporates emissions reduction into a green supply chain which considers consumers’ low-carbon preference behavior and government intensity regulations, in order to discuss the impacts of consumers’ environmental awareness and government constraints on optimal emissions reduction and profit, respectively. The paper first constructs three reduction models on the basis of reality: independent reduction by manufacturer, contractual reduction by brand and collaborative reduction by both. Then it concludes the optimal decisions and compare the models. The results show that both the profits and emissions reduction will be decreased with the strengthened carbon intensity constraint, but the cost-sharing contract can mitigate this negative effect on dominant brand and society. Meanwhile, the acceptable range of cost-sharing ratio will be smaller with a lower cost coefficient of emissions reduction and a higher consumers’ preference. Furthermore, government should design the incentive method or regulate the carbon market to improve the social welfare level. Lastly, a numerical study is conducted, the impact of several key factors on supply chain performance and model selection are presented for management decisions.

Keywords: Carbon emissions reduction; low-carbon preference; carbon emissions quota; carbon trading; supply chain contract (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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DOI: 10.1142/S0217595920500037

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