Design of an environmental contract under trade credits and carbon emission reduction

<p style='text-indent:20px;'>Most of the previous literatures proposed a single coordination contract to increase the total profit of the supply chain, while this paper focuses on how to design environmental contracts to increase economic and environmental performance in the context of sustainable development. This paper designs the environmental contract based on cap-and-trade mechanism and trade credits which has rarely been studied before, especially the impact of trade credit on environmental performance. We consider a green supply chain, assuming that the demand rate is linear with retail prices, joint carbon emission reduction efforts and trade credit. Two models, a decentralized one and a centralized one, are compared; four contracts are proposed. Via numerous examples and sensitivity analysis, we gain some insight into how to select supply chain contracts to better improve environmental performance. The results reveal that the manufacturer sharing the retailer's revenue and cost contract obtains the highest profit. While revenue sharing contract between both parties is the optimal environmental contract, but it is difficult to increase the profit of supply chain. Furthermore, it is found that trade credit works well in protecting the environment and plays a significant role in achieving coordination.</p>

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

Complexity ◽

10.1155/2021/8881605 ◽

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.

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Carbon emission reduction and coordination in a closed-loop supply chain with outsourcing remanufacturing

Kybernetes ◽

10.1108/k-11-2020-0800 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Na Wang ◽

Yulin Zhang ◽

Jing Li

Keyword(s):

Supply Chain ◽

Emission Reduction ◽

Carbon Emission ◽

Closed Loop ◽

Total Carbon ◽

Closed Loop Supply Chain ◽

Content Type ◽

Carbon Emission Reduction ◽

Optimal Decisions ◽

The Impact

PurposeOutsourcing remanufacturing is a major form of remanufacturing, and emission reduction is an important part of a manufacturer's production. This paper aims to investigate carbon emission reduction strategies in a closed-loop supply chain (CLSC) with outsourcing remanufacturing and design a contract to coordinate the CLSC.Design/methodology/approachThe authors establish two-period game models between an original equipment manufacturer (OEM) and third-party remanufacturer (TPR) in different scenarios, including decentralized decision, centralized decision and coordinated decision. Furthermore, the authors study the optimal decisions by maximizing the profit model. The authors also investigate the impact of a carbon tax and emission reduction on the optimal decisions through comparative analysis.FindingsEmission reduction increases the quantity of new products and the OEM's profit. However, emission reduction decreases the outsourcing fee, which is not conducive to remanufacturing; thus, the TPR's profit does not necessarily increase. Compared with a decentralized scenario, the output of remanufactured products and the total profit increase. When the acceptance level of remanufactured products is high enough or when emissions from remanufacturing are low enough, the total carbon emissions are reduced in the centralized scenario. For the coordination of the CLSC, the OEM needs to increase the outsourcing fee and the TPR needs to share part of the emission reduction costs.Research limitations/implicationsThe TPR can choose three different remanufacturing strategies, namely, no remanufacturing, partial remanufacturing or full remanufacturing. For the majority of firms, it is difficult to remanufacture all used products. Therefore, the analysis is based only on partial remanufacturing.Practical implicationsThe results provide insights for remanufacturing and emission reduction decisions, as well as a decision basis for the cooperation between the OEM and TPR.Originality/valueThe authors combine the OEM's carbon emission reduction with outsourcing remanufacturing, and investigate the impact of technological spillover on the TPR's profit.

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The Impact of Power Structures on Supply Chain Enterprises with Carbon Emission Reduction Decisions

International Journal of Business and Management ◽

10.5539/ijbm.v13n8p246 ◽

2018 ◽

Vol 13 (8) ◽

pp. 246

Author(s):

Fan Dandan ◽

Xu Qi

Keyword(s):

Supply Chain ◽

Emission Reduction ◽

Carbon Emission ◽

Stackelberg Game ◽

Reduction Rate ◽

Power Structures ◽

Supply Chain System ◽

Carbon Emission Reduction ◽

Stackelberg Model ◽

The Impact

This paper focuses on analyzing the impact of power structures of supply chain enterprises on their carbon emission reduction decisions. First, three game models (Nash, Manufacturer Stackelberg and Retailer Stackelberg) are constructed according to members’ different bargaining power, respectively. Then, the optimal carbon emission reduction decisions and profits of supply chain enterprises in different game models are solved and compared. The research results show that supply chain enterprises have the lowest carbon emission reduction rate in Nash game, and their corresponding profits are the least. As for Stackelberg game, the carbon emission reduction rate as a leader is greater than that as a follower, but the profit as a leader is less than that as a follower. The total profit of the entire supply chain system in Manufacturer Stackelberg model is always greater than that in Retailer Stackelberg model.

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Carbon Emission Reduction Decision and Revenue-Sharing Contract with Consumers’ Low-Carbon Preference and CER Cost under Carbon Tax

Mathematical Problems in Engineering ◽

10.1155/2021/3458607 ◽

2021 ◽

Vol 2021 ◽

pp. 1-11

Author(s):

Chao-qun Han ◽

Hua-ying Gu ◽

Li-hui Sui ◽

Chang-peng Shao

Keyword(s):

Supply Chain ◽

Emission Reduction ◽

Carbon Emission ◽

Carbon Tax ◽

Revenue Sharing ◽

Low Carbon ◽

Carbon Emission Reduction ◽

Revenue Sharing Contract ◽

Theoretical And Numerical Analysis ◽

The Impact

Since the tax of carbon emission is popular and consumers are exhibiting low-carbon preference, the green manufactures have to spend more extra cost on investing carbon emission reduction (CER) technology to decrease the carbon emission. To encourage the manufacture’s CER investment efforts, this paper explores the impact of carbon tax, CER cost, and consumers’ low-carbon preference on low-carbon decision-making and designs a revenue-sharing contract (RS) by constructing Stackelberg models. Based on the theoretical and numerical analysis, this paper finds that the supply chain would benefit from the increment of consumer’s environmental awareness but be depressed by the increase of the CER investment cost factor. Additionally, there exists a unique optimal carbon tax to make CER degree the maximum. Furthermore, RS can effectively promote manufacturers to reduce carbon emissions and also improve the supply chain efficiency.

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Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Mathematical Problems in Engineering ◽

10.1155/2020/9515710 ◽

2020 ◽

Vol 2020 ◽

pp. 1-17

Author(s):

Linming Qi ◽

Lu Liu ◽

Liwen Jiang ◽

Zicheng Wang ◽

Weiliang Zhao

Keyword(s):

Supply Chain ◽

Risk Aversion ◽

Emission Reduction ◽

Carbon Emission ◽

Trade Credit ◽

Carbon Trading ◽

Low Carbon ◽

Carbon Emission Reduction ◽

Carbon Supply ◽

Reduction Effort

Many small and medium enterprises (SMEs) with capital constraints often have no access or find it costly to obtain a loan from a bank; the retailer tends to borrow money from other enterprises in the supply chain by trade credit financing. We consider an emission-dependent supply chain with one emission-dependent manufacturer and one capital-constrained retailer in need of financing to explore the optimal operational and environmental strategies of a low-carbon supply chain under trade credit financing. We use a Stackelberg game model to depict the low-carbon supply chain. We analyse the optimal carbon-emission reduction effort, wholesale price, and order quantity in the equilibrium state. The impacts of key parameters, such as the retailer’s internal working capital, the manufacturer’s risk-aversion degree, and the carbon-trading price on the supply chain operation, are analysed. The results show that the retailer’s capital constraint causes the carbon-emission reduction effort, wholesale price, and order quantity to improve synchronously. The supply chain achieves a win-win outcome for both the manufacturer and the retailer when the capital-constrained retailer is funded via trade credit from the manufacturer. The in-depth development of financing is beneficial to the manufacturer but is a disadvantage for the retailer. When the initial carbon-emission quota is low, the manufacturer benefits from a relatively lower carbon-trading price. Otherwise, a higher carbon-trading price is better for the manufacturer. The “carbon-trading price trap” ensures that the retailer’s profit is minimal. We further investigate the scenario in which the manufacturer is risk averse and find that the retailer will purchase fewer products and that the manufacturer will gain less profit to decrease the carbon-emission reduction effort. The manufacturer’s risk aversion is unfavourable to both the economic and environmental outcomes of the whole supply chain. This research provides strategic support for a low-carbon supply chain to carry out operational decisions in the context of enterprise capital constraint. To examine the theoretical results, the data used in the existing literature are further used to simulate the corresponding conclusions. Our research enriches the existing supply chain finance literature and provides decision support for the supply chain core enterprise.

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Investigating the Impact of Carbon Subsidy Policy on the Decision-Making of Remanufacturing Supply Chain

10.3233/faia210305 ◽

2021 ◽

Author(s):

Yu Zhang ◽

Tianshan Ma ◽

Syed Abdul Rehman Khan

Keyword(s):

Decision Making ◽

Supply Chain ◽

Emission Reduction ◽

Carbon Emission ◽

Quality Level ◽

Waste Products ◽

Carbon Emission Reduction ◽

The Government ◽

The Cost ◽

The Impact

This research is to investigate the decision making of the members of remanufacturing supply chain under the government involvement. Different scenarios are analyzed in this research, and it is found that the subsidy for carbon emission reduction can increase the WPs (waste products) reusing. When the recycler participates in remanufacturing supply chain, the cost of remanufacturer will be shared and through centralizing the decision making, the carbon emission reduction will be enhanced and the whole supply chain’s profit will decrease. So it is suggested that the government need to adjust the subsidy for carbon emission reduction in terms of the quality level of WPs and the cooperation between recycler and remanufacturer is suggested, especially in the high-value waste remanufacturing supply chain.

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