Investment strategy analysis of emission-reduction technology under cost subsidy policy in the carbon trading market

Kybernetes ◽  
2019 ◽  
Vol 49 (2) ◽  
pp. 252-284 ◽  
Author(s):  
Qiang Hou ◽  
Jiayi Sun
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Social Welfare ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Investment Strategy ◽  
Low Carbon ◽  
Subsidy Policy ◽  
Content Type ◽  
Technology Investment

Purpose The authors consider a dynamic emission-reduction technology investment decision-making problem for an emission-dependent dyadic supply chain consists of a manufacturer and a retailer under subsidy policy for carbon emission reduction. The consumers are assumed to prefer to low-carbon products and formulate a supply chain optimal control problem. Design/methodology/approach The authors adopt differential game to analyze investment strategies of cost subsidy coefficient with respect to vertical incentive of a manufacturer and a retailer. A comparison analysis under four different decision-making situations, including decentralized decision-making, centralized decision-making, maximizing social welfare, is obtained. Findings The results show that the economic benefit and environmental pressure have a win–win performance in centralized decision-making. In four different game models, equilibrium strategies, profits and social welfare show changing diversity and have a consistent development trend as time goes on. Research limitations/implications The authors estimate the demand function is a linear function in this paper. According to the consumers’ preference to low-carbon products, consumer’s awareness meets the law of diminishing marginal utility like advertising goodwill accumulation. The carbon-sensitive coefficient might be a quadratic expression, which will complicate the problem and be consistent with reality. Practical implications It captures that there is a necessity to strengthen cooperation and exchange of carbon emission technology among the enterprises by simulation of different decision-makings when government granted cost subsidy. Social implications The results provide significant guidelines for the supply chain to make decision-makings of emission-reduction technology investment and relevant government departments to determine emission subsidies costs. Originality/value An endogenous subsidies coefficient is produced by the social welfare function. Distinguished from previous study, it also considered the influences of carbon emission trade policy and consumer preference.

Cost-Sharing Contract in Low Carbonization Supply Chain Based on Improving Demand for Low-Carbon Products

2014 ◽  
Vol 1073-1076 ◽  
pp. 2539-2544
Author(s):  
Yan Ju Zhou ◽  
Yu Qing Huang
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Retail Price ◽  
Market Demand ◽  
Low Carbon ◽  
Order Quantity ◽  
Carbon Emission Reduction ◽  
Reduction Cost

For the existence of carbon emission reduction cost, the retail price of the products is so high that the market demand is low, which restricts the promotion of low-carbon products. On the background of a bilateral-monopoly supply chain consisting of a single manufacturer and a single retailer, we establish Stackelberg models based on the carbon emission reduction cost-sharing. And we analyze the changes of the order quantity, the profits of each member and the whole supply chain before and after the implementation of the carbon emission reduction cost-sharing contract. According to the research, when the carbon emission reduction cost-sharing contract is introduced into the model, it leads to a good consequence that the optimal order quantity of the low-carbon product increases, the retail price decreases, and the manufacturer and the retailer will get Pareto improvement on certain condition. Then we derivate the necessary conditions that the profit of the retailer and the manufacturer could both increase.

scholarly journals Supply Chain Investment in Carbon Emission-Reducing Technology Based on Stochasticity and Low-Carbon Preferences

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-18
Author(s):  
Shan Yu ◽  
Qiang Hou
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Equilibrium Strategy ◽  
Market Demand ◽  
Low Carbon ◽  
Carbon Emission Reduction ◽  
Dynamic Perspective ◽  
The Cost ◽  
The Impact

Due to excessive greenhouse gas emissions, carbon emission-reducing measures are urgently needed. Important emission-reduction measures mainly include carbon trading and low-carbon cost subsidies. Comprehensive consideration of these two policies is a research hotspot in the field of low-carbon technology investment. Based on this background, this paper considers the impact of consumer low-carbon preferences on market demand and the impact of uncertainty in carbon emission-reduction behaviour. We construct a stochastic differential game model with upstream and downstream enterprises based on cost-sharing coordination under a cost subsidy. From a dynamic perspective, this paper researches the optimal equilibrium strategy and evolution characteristics of the joint emission-reduction mechanism in a supply chain. This paper discusses the sensitivity of the parameters and uses numerical simulation to verify the impact of each parameter on the emission-reduction decision-making activities of stakeholders after introducing the cost subsidy. The results show that a cost subsidy policy can promote carbon emission-reduction investment and supply chain profit. Thus, it is important to strengthen technical cooperation and exchange among enterprises.

scholarly journals Optimal Pricing, Ordering, and Coordination for Prefabricated Building Supply Chain with Power Structure and Flexible Cap-and-Trade

Mathematics ◽  
2021 ◽  
Vol 9 (19) ◽  
pp. 2426
Author(s):  
Wen Jiang ◽  
Menglin Liu ◽  
Lu Gan ◽  
Chong Wang
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Power Structure ◽  
Supply Chain Performance ◽  
Low Carbon ◽  
Cap And Trade ◽  
Power Structures ◽  
Carbon Emission Reduction ◽  
Prefabricated Building

Under the increasing pressure of global emission reduction, prefabricated buildings are becoming more and more popular. As prefabricated building manufacturers and assemblers are emerging in the market, how do they make decisions of pricing, ordering, and emission reduction? In this paper, game theory is used to make the decisions for the prefabricated building supply chain with flexible cap-and-trade and different power structures, i.e., using prefabricated building manufacturers as the leader, using the vertical Nash equilibrium, and using prefabricated building assemblers as the leader. The two-part tariff contract is designed to coordinate the supply chain and to improve the supply chain performance. Moreover, we discuss the influence of different power structures and the two-part tariff contract on the optimal decisions and profits. Finally, numerical analysis is used to verify the conclusions. This indicates that the supply chain leaders will gain a higher profit and that the power structure has a significant influence on the two-part tariff contract, which will result in an unfair distribution of profit. High carbon trading prices benefit carbon emission reduction. Consumer low-carbon awareness has a positive effect on carbon emission reduction and supply chain performance.

scholarly journals Decision Optimization of Low-Carbon Dual-Channel Supply Chain of Auto Parts Based on Smart City Architecture

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-14 ◽  
Author(s):  
Zheng Liu ◽  
Bin Hu ◽  
Bangtong Huang ◽  
Lingling Lang ◽  
Hangxin Guo ◽  
...  
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Carbon Emissions ◽  
Smart City ◽  
Carbon Emission ◽  
Low Carbon ◽  
Supply Chain System ◽  
Chain System ◽  
Carbon Supply ◽  
Auto Parts

Affected by the Internet, computer, information technology, etc., building a smart city has become a key task of socialist construction work. The smart city has always regarded green and low-carbon development as one of the goals, and the carbon emissions of the auto parts industry cannot be ignored, so we should carry out energy conservation and emission reduction. With the rapid development of the domestic auto parts industry, the number of car ownership has increased dramatically, producing more and more CO2 and waste. Facing the pressure of resources, energy, and environment, the effective and circular operation of the auto parts supply chain under the low-carbon transformation is not only a great challenge, but also a development opportunity. Under the background of carbon emission, this paper establishes a decision-making optimization model of the low-carbon supply chain of auto parts based on carbon emission responsibility sharing and resource sharing. This paper analyzes the optimal decision-making behavior and interaction of suppliers, producers, physical retailers, online retailers, demand markets, and recyclers in the auto parts industry, constructs the economic and environmental objective functions of low-carbon supply chain management, applies variational inequality to analyze the optimal conditions of the whole low-carbon supply chain system, and finally carries out simulation calculation. The research shows that the upstream and downstream auto parts enterprises based on low-carbon competition and cooperation can effectively manage the carbon footprint of the whole supply chain through the sharing of responsibilities and resources among enterprises, so as to reduce the overall carbon emissions of the supply chain system.

Environmental Friendliness in Low Carbon Supply Chain and Operations

2021 ◽  
pp. 2421-2430
Author(s):  
Muhammad Shabir Shaharudin ◽  
Yudi Fernando
Keyword(s):  
Environmental Management ◽  
Supply Chain ◽  
Energy Management ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Manufacturing Industry ◽  
Low Carbon ◽  
Environmental Friendliness ◽  
Carbon Supply ◽  
Business Operations

Managing operations in manufacturing industry has progressed significantly over the years due to customer requirements. Globalization and environmental awareness have force firm's operations to align with the direction of environmental management. The importance of carbon emission reduction for environmental management has led firms to adopt low carbon operations practices such as energy management. The emergence of energy management and environmental friendliness principle in business operations have changed the landscape of business competition in the manufacturing industry. Nevertheless, the outcomes and concept remain unclear and availability of limited studies on the specific scope of environmental friendliness have not extensively discussed. As such, the purpose of this chapter is to discuss the environmental friendliness approach in operations from the perspective of manufacturing industry.

scholarly journals Game Theoretic Analysis of Carbon Emission Reduction and Sales Promotion in Dyadic Supply Chain in Presence of Consumers’ Low-Carbon Awareness

2014 ◽  
Vol 2014 ◽  
pp. 1-13 ◽  
Author(s):  
Liangjie Xia ◽  
Longfei He
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Sales Promotion ◽  
Side Payment ◽  
Low Carbon ◽  
Carbon Emission Reduction ◽  
Game Theoretic Analysis ◽  
Game Theoretic ◽  
The Cost

The paper studies how the combination of the manufacturer’s carbon emission reduction and the retailer’s emission reduction relevant promotion impacts the performances of a dyadic supply chain in low-carbon environment. We consider three typical scenarios, that is, centralized and decentralized without or with side-payment. We compare measures of supply chain performances, such as profitabilities, emission reduction efficiencies, and effectiveness, in these scenarios. To improve chain-wide performances, a new side-payment contract is designed to coordinate the supply chain and numerical experiments are also conducted. We find the following. (1) In decentralized setting, the retailer will provide emission cutting allowance to the manufacturer only if their unit product profit margin is higher enough than the manufacturer’s, and the emission reduction level of per unit product is a monotonically increasing function with respect to the cost pooling proportion provided by the retailer; (2) the new side-payment contract can coordinate the dyadic supply chain successfully due to its integrating sales promotion effort and emission reduction input, which results in system pareto optimality under decentralized individual rationality but achieves a collective rationality effect in the centralized setting; (3) when without external force’s regulation, consumers’ low-carbon awareness is to enhance consumers’ utility and decrease profits of supply chain firms.

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