Blockchain-Enabled Energy Demand Side Management Cap and Trade Model

Global economic growth, demographic explosion, digitization, increased mobility, and greater demand for heating and cooling due to climate change in different world areas are the main drivers for the surge in energy demand. The increase in energy demand is the basis of economic challenges for power companies alongside several socio-economic problems in communities, such as energy poverty, defined as the insufficient coverage of energy needs, especially in the residential sector. Two main strategies are considered to meet this increased demand. The first strategy focuses on new sustainable and eco-friendly modes of power generation, such as renewable energy resources and distributed energy resources. The second strategy is demand-side oriented rather than the supply side. Demand-side management, demand response (DR), and energy efficiency (EE) programs fall under this category. On the other hand, the decentralization and digitization of the energy sector convoyed by the emersion of new technologies such as blockchain, Internet of Things (IoT), and Artificial Intelligence (AI), opened the door to new solutions for the energy demand dilemma. Among these technologies, blockchain has proved itself as a decentralized trading platform between untrusted peers without the involvement of a trusted third party. This newly introduced Peer-to-Peer (P2P) trading model can be used to create a new demand load control model. In this article, the concept of an energy cap and trade demand-side management (DSM) model is introduced and simulated. The introduced DSM model is based on the concept of capping consumers’ monthly energy consumption and rewarding consumers who do not exceed this cap with energy tradeable credits that can be traded using blockchain-based Peer-to-Peer (P2P) energy trading. A model based on 200 households is used to simulate the proposed DSM model and prove that this model can be beneficial to both energy companies and consumers.

The Political Economy of Carbon Pricing: Lessons from the Mexican Carbon Tax Experience for the Mexican Cap-and-Trade System

Price-based climate change policy instruments, such as carbon taxes or cap-and-trade systems, are known for their potential to generate desirable results such as reducing the cost of meeting environmental targets. Nonetheless, carbon pricing policies face important economic and political hurdles. Powerful stakeholders tend to obstruct such policies or dilute their impacts. Additionally, costs are borne by those who implement the policies or comply with them, while benefits accrue to all, creating incentives to free ride. Finally, costs must be paid in the present, while benefits only materialize over time. This chapter analyses the political economy of the introduction of a carbon tax in Mexico in 2013 with the objective of learning from that process in order to facilitate the eventual implementation of an effective cap-and-trade system in Mexico. Many of the lessons in Mexico are likely to be applicable elsewhere. As countries struggle to meet the goals of international environmental agreements, it is of utmost importance that we understand the conditions under which it is feasible to implement policies that reduce carbon emissions.

The Effect of Fairness Concern on Carbon Emission Reduction and Revenue Distribution in Construction Supply Chain: Power Structure Perspective

This paper invested a two-echelon construction supply chain that consists of a general contractor and a subcontractor. This paper constructs the centralized model and the decentralized models, respectively, and studies the emission reduction and revenue distribution strategies of construction supply chain considering fairness concern and cap-and-trade. Numerical analysis is carried out to analyze the influence of cap-and-trade and fairness concern on the optimal decision and the maximum profit of construction supply chain. This paper shows that, under cap-and-trade policy, the centralized model has the best emission reduction effect and the highest supply chain profit without fairness concern, while the general contractor’s Stackelberg model has the best emission reduction effect and the highest supply chain profit with fairness concern. In the two scenarios, the Vertical Nash model is the most unfavorable to emission reduction, and it will also seriously damage the interests of enterprises. In practice, supply chain should choose the general contractor’s Stackelberg model and avoid the Vertical Nash model. Because fairness concern of the subcontractor will damage the supply chain profits and emission reduction performance, the general contractor shall try to select the subcontractor with lower fairness concern to avoid the loss of profit. Besides, enterprises should actively take measures to reduce fairness concern, such as enterprises signing the contract price confidentiality clause, which aims to reduce fairness concern of the subcontractor. The results of this paper can not only enrich the research content of construction supply chain management, but also provide references for the government to formulate emission reduction policies.

Research on Dynamic and Complexity of Duopoly Price Strategies between Low-Carbon and Nonlow-Carbon Products under Cap-and-Trade Policies

This paper studies the complexity of the pricing system for the production of low-carbon and nonlow-carbon products in a market composed of duopoly manufacturers under the cap-and-trade policies. Through nonlinear system theory and numerical derivation and simulation, it considers the influence of different market power structures, carbon trading prices, consumer environmental awareness, and other factors on price decisions, carbon emission decisions, profits, and system stability. The influence of price adjustment parameters and unit product carbon emission decision adjustment parameters on the complexity of the pricing system under different market power structures is analyzed. And, it was found that compared with the variable feedback chaos control method, the parameter adjustment chaos control method is more effective in controlling the pricing system in this paper. Our research provides management implications for market competition and operational decision-making for low-carbon and nonlow-carbon products.

Pricing and Coordination Strategies in a Dual Channel Supply Chain with Green Production under Cap and Trade Regulation

In this paper, we consider a two level dual channel green supply chain consisting of a retailer and a manufacturer with a separate sales channel for the manufacturer. The manufacturer uses green technology in its production and is required to produce in accordance with the cap and trade regulation. Using game theory, we compare cases where members decide to compete or cooperate with each other in terms of pricing and production. Our main contributions are studying the dual channel supply chain model where a manufacturer is regulated by the cap and trade system, using green production and also on their decision as to whether to compete or cooperate with a value-adding retailer. We also investigated the impact of green production on lowering the amount of carbon emissions produced. In the present study, supply chain members are advised to cooperate with each other in order to achieve the environmental benefits of the cap and trade system and, to avoid market failure, we further recommend that manufacturers should invest in green technologies for their production.