IDEAS home Printed from https://ideas.repec.org/a/wsi/apjorx/v37y2020i02ns0217595920500037.html
   My bibliography  Save this article

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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Jiaping Xie & Jing Li & Ling Liang & Xu Fang & Guang Yang & Lihong Wei, 2020. "Contracting Emissions Reduction Supply Chain Based on Market Low-Carbon Preference and Carbon Intensity Constraint," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 37(02), pages 1-34, March.
  • Handle: RePEc:wsi:apjorx:v:37:y:2020:i:02:n:s0217595920500037
    DOI: 10.1142/S0217595920500037
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/abs/10.1142/S0217595920500037
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1142/S0217595920500037?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cramton, Peter & Kerr, Suzi, 2002. "Tradeable carbon permit auctions: How and why to auction not grandfather," Energy Policy, Elsevier, vol. 30(4), pages 333-345, March.
    2. STUART McDONALD & JOANNA POYAGO-THEOTOKY, 2017. "Green Technology and Optimal Emissions Taxation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(2), pages 362-376, April.
    3. Xie, JiaPing & Liang, Ling & Liu, LuHao & Ieromonachou, Petros, 2017. "Coordination contracts of dual-channel with cooperation advertising in closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 528-538.
    4. Xu, Xiaoping & Zhang, Wei & He, Ping & Xu, Xiaoyan, 2017. "Production and pricing problems in make-to-order supply chain with cap-and-trade regulation," Omega, Elsevier, vol. 66(PB), pages 248-257.
    5. Shaofu Du & Li Hu & Li Wang, 2017. "Low-carbon supply policies and supply chain performance with carbon concerned demand," Annals of Operations Research, Springer, vol. 255(1), pages 569-590, August.
    6. Luo, Zheng & Chen, Xu & Wang, Xiaojun, 2016. "The role of co-opetition in low carbon manufacturing," European Journal of Operational Research, Elsevier, vol. 253(2), pages 392-403.
    7. Lund, Peter, 2007. "Impacts of EU carbon emission trade directive on energy-intensive industries -- Indicative micro-economic analyses," Ecological Economics, Elsevier, vol. 63(4), pages 799-806, September.
    8. Plambeck, Erica L., 2012. "Reducing greenhouse gas emissions through operations and supply chain management," Energy Economics, Elsevier, vol. 34(S1), pages 64-74.
    9. Hu, Benyong & Feng, Yi, 2017. "Optimization and coordination of supply chain with revenue sharing contracts and service requirement under supply and demand uncertainty," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 185-193.
    10. Niu, Baozhuang & Jin, Delong & Pu, Xujin, 2016. "Coordination of channel members’ efforts and utilities in contract farming operations," European Journal of Operational Research, Elsevier, vol. 255(3), pages 869-883.
    11. Carolyn Fischer & Alan K. Fox, 2007. "Output-Based Allocation of Emissions Permits for Mitigating Tax and Trade Interactions," Land Economics, University of Wisconsin Press, vol. 83(4), pages 575-599.
    12. Tully, Stephanie M. & Winer, Russell S., 2014. "The Role of the Beneficiary in Willingness to Pay for Socially Responsible Products: A Meta-analysis," Journal of Retailing, Elsevier, vol. 90(2), pages 255-274.
    13. Shaofu Du & Jiaang Zhu & Huifang Jiao & Wuyi Ye, 2015. "Game-theoretical analysis for supply chain with consumer preference to low carbon," International Journal of Production Research, Taylor & Francis Journals, vol. 53(12), pages 3753-3768, June.
    14. Zhang, Bin & Xu, Liang, 2013. "Multi-item production planning with carbon cap and trade mechanism," International Journal of Production Economics, Elsevier, vol. 144(1), pages 118-127.
    15. Gérard P. Cachon & Paul H. Zipkin, 1999. "Competitive and Cooperative Inventory Policies in a Two-Stage Supply Chain," Management Science, INFORMS, vol. 45(7), pages 936-953, July.
    16. Bastien Girod & Peter De Haan, 2010. "More or Better? A Model for Changes in Household Greenhouse Gas Emissions due to Higher Income," Journal of Industrial Ecology, Yale University, vol. 14(1), pages 31-49, January.
    17. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiuyue Li & Hao Wang & Zhenshan Li & Shangwei Yuan, 2022. "A Comparative Study of the Effect of Different Carbon-Reduction Policies on Outsourcing Remanufacturing," IJERPH, MDPI, vol. 19(6), pages 1-22, March.
    2. Yunting Feng & Yong Geng & Ge Zhao & Mengya Li, 2022. "Carbon Emission Constraint Policy in an OEM and Outsourcing Remanufacturer Supply Chain with Consumer Preferences," IJERPH, MDPI, vol. 19(8), pages 1-16, April.
    3. Yuan Yuan & Feng Cai & Lingling Yang, 2020. "Renewable Energy Investment under Carbon Emission Regulations," Sustainability, MDPI, vol. 12(17), pages 1-15, August.
    4. Chauhan, Chetna & Kaur, Puneet & Arrawatia, Rakesh & Ractham, Peter & Dhir, Amandeep, 2022. "Supply chain collaboration and sustainable development goals (SDGs). Teamwork makes achieving SDGs dream work," Journal of Business Research, Elsevier, vol. 147(C), pages 290-307.
    5. Hanbo Wu & Yaxin Sun & Yutong Su & Ming Chen & Hongxia Zhao & Qi Li, 2022. "Which Is the Best Supply Chain Policy: Carbon Tax, or a Low-Carbon Subsidy?," Sustainability, MDPI, vol. 14(10), pages 1-20, May.
    6. Wenqiang Guo & Siqi Chen & Ming Lei, 2023. "Evolutionary Game and Strategy Analysis of Carbon Emission Reduction in Supply Chain Based on System Dynamic Model," Sustainability, MDPI, vol. 15(11), pages 1-22, June.
    7. Jianfeng Liu & Liguo Zhou & Yuyan Wang, 2021. "Altruistic Preference Models of Low-Carbon E-Commerce Supply Chain," Mathematics, MDPI, vol. 9(14), pages 1-20, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yang, Huixiao & Luo, Jianwen & Wang, Haijun, 2017. "The role of revenue sharing and first-mover advantage in emission abatement with carbon tax and consumer environmental awareness," International Journal of Production Economics, Elsevier, vol. 193(C), pages 691-702.
    2. Ji, Jingna & Zhang, Zhiyong & Yang, Lei, 2017. "Comparisons of initial carbon allowance allocation rules in an O2O retail supply chain with the cap-and-trade regulation," International Journal of Production Economics, Elsevier, vol. 187(C), pages 68-84.
    3. Chen, Wenbo, 2018. "Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharingAuthor-Name: Yang, Huixiao," Omega, Elsevier, vol. 78(C), pages 179-191.
    4. Qiang Han & Yuyan Wang, 2018. "Decision and Coordination in a Low-Carbon E-Supply Chain Considering the Manufacturer’s Carbon Emission Reduction Behavior," Sustainability, MDPI, vol. 10(5), pages 1-23, May.
    5. Shoufeng Ji & Dan Zhao & Xiaoshuai Peng, 2018. "Joint Decisions on Emission Reduction and Inventory Replenishment with Overconfidence and Low-Carbon Preference," Sustainability, MDPI, vol. 10(4), pages 1-21, April.
    6. Yang, Lei & Hu, Yijuan & Huang, Lijuan, 2020. "Collecting mode selection in a remanufacturing supply chain under cap-and-trade regulation," European Journal of Operational Research, Elsevier, vol. 287(2), pages 480-496.
    7. Jun Wang & Xianxue Cheng & Xinyu Wang & Hongtao Yang & Shuhua Zhang, 2019. "Myopic versus Farsighted Behaviors in a Low-Carbon Supply Chain with Reference Emission Effects," Complexity, Hindawi, vol. 2019, pages 1-15, February.
    8. Yuyin Yi & Jinxi Li, 2018. "Cost-Sharing Contracts for Energy Saving and Emissions Reduction of a Supply Chain under the Conditions of Government Subsidies and a Carbon Tax," Sustainability, MDPI, vol. 10(3), pages 1-33, March.
    9. Jiasen Sun & Guo Li, 2020. "Designing a double auction mechanism for the re-allocation of emission permits," Annals of Operations Research, Springer, vol. 291(1), pages 847-874, August.
    10. Wen, Wen & Zhou, P. & Zhang, Fuqiang, 2018. "Carbon emissions abatement: Emissions trading vs consumer awareness," Energy Economics, Elsevier, vol. 76(C), pages 34-47.
    11. Yugang Yu & Xue Li & Xiaoping Xu, 2022. "Reselling or marketplace mode for an online platform: the choice between cap-and-trade and carbon tax regulation," Annals of Operations Research, Springer, vol. 310(1), pages 293-329, March.
    12. Kuiti, Mithu Rani & Ghosh, Debabrata & Basu, Preetam & Bisi, Arnab, 2020. "Do cap-and-trade policies drive environmental and social goals in supply chains: Strategic decisions, collaboration, and contract choices," International Journal of Production Economics, Elsevier, vol. 223(C).
    13. Konur, Dinçer, 2017. "Non-collaborative emission targets joining and quantity flow decisions in a Stackelberg setting," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 105(C), pages 60-82.
    14. Linghong Zhang & Hao Zhou & Yanyan Liu & Rui Lu, 2018. "The Optimal Carbon Emission Reduction and Prices with Cap and Trade Mechanism and Competition," IJERPH, MDPI, vol. 15(11), pages 1-23, November.
    15. Ji, Jingna & Li, Tao & Yang, Lei, 2023. "Pricing and carbon reduction strategies for vertically differentiated firms under Cap-and-Trade regulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    16. Liangjie Xia & Yongwan Bai & Sanjoy Ghose & Juanjuan Qin, 2022. "Differential game analysis of carbon emissions reduction and promotion in a sustainable supply chain considering social preferences," Annals of Operations Research, Springer, vol. 310(1), pages 257-292, March.
    17. Sun Jinling & Zhu Peiyu & Jin Shumo & Wang Hongbin, 2019. "Research on the Loss Sharing Contract in Supply Chain Under Asymmetric Information," Journal of Systems Science and Information, De Gruyter, vol. 7(2), pages 187-198, April.
    18. Peng Liu & Ying Chen, 2022. "Differential Game Model of Shared Manufacturing Supply Chain Considering Low-Carbon Emission Reduction," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    19. Peng Ma & Yeming Gong & Mingzhou Jin, 2019. "Quality efforts in medical supply chains considering patient benefits," Post-Print hal-02312386, HAL.
    20. Anouliès, Lisa, 2017. "Heterogeneous firms and the environment: a cap-and-trade program," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 84-101.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:apjorx:v:37:y:2020:i:02:n:s0217595920500037. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/apjor/apjor.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.