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Unregulated Cap-and-Trade Model for Sustainable Supply Chain Management

Author

Listed:
  • Massimiliano Caramia

    (Dipartimento di Ingegneria dell’Impresa, Università di Roma “Tor Vergata”, Viale del Politecnico 1, 00133 Rome, Italy
    These authors contributed equally to this work.)

  • Giuseppe Stecca

    (Consiglio Nazionale delle Ricerche, Istituto di Analisi dei Sistemi ed Informatica “Antonio Ruberti”, Via dei Taurini 19, 00185 Rome, Italy
    These authors contributed equally to this work.)

Abstract

Cap-and-trade models have been largely studied in the literature when it comes to reducing emissions in a supply chain. In this paper, further pursuing the goal of analyzing the effectiveness of cap-and-trade strategies in reducing emissions in supply chains, we propose a mathematical model for sustainable supply chain management. This optimization program aims at reducing emissions and supply chain costs in an unregulated scenario w.r.t. the cap definition, i.e., trading CO 2 is allowed but no formal limit on the CO 2 emissions is imposed. Also, we considered an initial budget for technological investments by the facilities in the considered supply chain, allowing plants to reduce their unit production emissions at a different unit production cost. For this model, differently from what exists in the literature, we derive some theoretical conditions guaranteeing that, if obeyed, the emissions over time have a non-increasing trend meaning that decreasing caps over time can be attained with a self-regulated scenario. Computational results show the effectiveness of our approach.

Suggested Citation

  • Massimiliano Caramia & Giuseppe Stecca, 2024. "Unregulated Cap-and-Trade Model for Sustainable Supply Chain Management," Mathematics, MDPI, vol. 12(3), pages 1-14, February.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:3:p:477-:d:1332181
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    References listed on IDEAS

    as
    1. Qingguo Bai & Jianteng Xu & Yuzhong Zhang, 2022. "The distributionally robust optimization model for a remanufacturing system under cap-and-trade policy: a newsvendor approach," Annals of Operations Research, Springer, vol. 309(2), pages 731-760, February.
    2. Sohrab Faramarzi-Oghani & Parisa Dolati Neghabadi & El-Ghazali Talbi & Reza Tavakkoli-Moghaddam, 2023. "Meta-heuristics for sustainable supply chain management: a review," International Journal of Production Research, Taylor & Francis Journals, vol. 61(6), pages 1979-2009, March.
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    4. repec:dau:papers:123456789/10174 is not listed on IDEAS
    5. Nguyen, Hieu T. & Felder, Frank A., 2020. "Generation expansion planning with renewable energy credit markets: A bilevel programming approach," Applied Energy, Elsevier, vol. 276(C).
    6. Akulker, Handan & Aydin, Erdal, 2023. "Optimal design and operation of a multi-energy microgrid using mixed-integer nonlinear programming: Impact of carbon cap and trade system and taxing on equipment selections," Applied Energy, Elsevier, vol. 330(PA).
    Full references (including those not matched with items on IDEAS)

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