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Emission-dependent supply chain and environment-policy-making in the ‘cap-and-trade’ system

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Listed:
  • Du, Shaofu
  • Zhu, Lili
  • Liang, Liang
  • Ma, Fang

Abstract

The paper focuses on a so-called emission-dependent supply chain consisting of one single emission-dependent manufacturer and one single emission permit supplier in the ‘cap-and-trade’ system, where emission permit becomes requisite for production. We consider the emission cap of emission-dependent manufacturer allocated by the government as a kind of environmental policy and formally investigate its influence on decision-makings within the concerned emission-dependent supply chain as well as distribution fairness in social welfare. It is proved that the system-wide and the manufacturer's profits increase with the emission cap while the permit supplier's decreases. There is room for manufacturer and permit supplier to coordinate the supply chain to get more profit in a certain condition.

Suggested Citation

  • Du, Shaofu & Zhu, Lili & Liang, Liang & Ma, Fang, 2013. "Emission-dependent supply chain and environment-policy-making in the ‘cap-and-trade’ system," Energy Policy, Elsevier, vol. 57(C), pages 61-67.
  • Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:61-67
    DOI: 10.1016/j.enpol.2012.09.042
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    References listed on IDEAS

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    1. Choudhary, Alok & Sarkar, Sagar & Settur, Srikar & Tiwari, M.K., 2015. "A carbon market sensitive optimization model for integrated forward–reverse logistics," International Journal of Production Economics, Elsevier, vol. 164(C), pages 433-444.
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    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. Gao Xiang Lou & Hai Yang Xia & Jie Qiong Zhang & Ti Jun Fan, 2015. "Investment Strategy of Emission-Reduction Technology in a Supply Chain," Sustainability, MDPI, Open Access Journal, vol. 7(8), pages 1-25, August.
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    9. Bigerna, Simona & Bollino, Carlo Andrea & Micheli, Silvia, 2016. "Renewable energy scenarios for costs reductions in the European Union," Renewable Energy, Elsevier, vol. 96(PA), pages 80-90.
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    12. Bai, Qingguo & Chen, Mingyuan & Xu, Lei, 2017. "Revenue and promotional cost-sharing contract versus two-part tariff contract in coordinating sustainable supply chain systems with deteriorating items," International Journal of Production Economics, Elsevier, vol. 187(C), pages 85-101.
    13. 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.
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    21. Xu, Xiaoping & He, Ping & Xu, Hao & Zhang, Quanpeng, 2017. "Supply chain coordination with green technology under cap-and-trade regulation," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 433-442.
    22. Jiang, Jingjing & Xie, Dejun & Ye, Bin & Shen, Bo & Chen, Zhanming, 2016. "Research on China’s cap-and-trade carbon emission trading scheme: Overview and outlook," Applied Energy, Elsevier, vol. 178(C), pages 902-917.
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