Optimal carbon tax design for achieving low carbon supply chains

Chen, Xu; Yang, Huan; Wang, Xiaojun; Choi, Tsan‐Ming

doi:10.1007/s10479-020-03621-9

Cited by 37 publications

(14 citation statements)

References 60 publications

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“…Numerous scholars have studied the topic of the low-carbon supply chain from various perspectives for the past few years. Firstly, some recent papers have analyzed and compared different carbon policies and regulations in an LCSC (e.g., [ 7 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 ]). Benjaafar et al [ 20 ] explored the production issues of a firm under four emission control policies, i.e., carbon offsets, carbon tax, cap-and-trade, and strict carbon caps.…”

Section: Literature Reviewmentioning

confidence: 99%

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Impacts of Supply Chain Competition on Firms’ Carbon Emission Reduction and Social Welfare under Cap-and-Trade Regulation

Xue

Sun

2022

IJERPH

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In the carbon neutrality era, firms are facing increasingly intense environmental pressure and market competition. This paper considers two competitive supply chains with consumers’ low-carbon preference under the cap-and-trade regulation, each of which consists of one manufacturer and one retailer. Considering competition or integration in vertical and horizontal directions, four different supply chain structures are modeled. By applying a game-theoretical approach, the equilibrium pricing, carbon emission reduction (CER) level, profit, and social welfare are obtained. Through comparison and analysis, the economic and environmental impacts of supply chain competition are explored. The results show that (1) the carbon quota acts as a kind of financial subsidy and brings direct economic profit to the supply chain, which cannot be used to incentivize the firm to invest in CER technology; (2) the HCVI strategy can bring the highest CER level, the most market demand, and social welfare among the four strategies; (3) for the enterprise and the government, it is recommended to take measures and enact policies to strengthen the vertical integration and horizontal competition between supply chains. Our study can guide firms on how to cope with increasingly fierce industry competition and environmental pressure by adjusting their operational decisions and supply chain structure.

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Section: Literature Reviewmentioning

confidence: 99%

“…Xia et al [ 23 ] investigated carbon emission reduction and pricing policies considering reciprocity preferences under a cap-and-trade system. Chen et al [ 24 ] explored the optimal carbon tax design in an LCSC. Fang et al [ 25 ] examined how carbon tariffs affect the global emission control in a global supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Impacts of Supply Chain Competition on Firms’ Carbon Emission Reduction and Social Welfare under Cap-and-Trade Regulation

Xue

Sun

2022

IJERPH

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“…Xu et al [ 26 ] studied the joint production and pricing problem under cap-and-trade and carbon tax regulations. Chen et al [ 27 ] investigated the optimal carbon tax design problem in a low-carbon supply chain. Fang et al [ 28 ] studied the influence of carbon tariffs on global emission control in a global supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Incentive Mechanisms for Carbon Emission Abatement Considering Consumers’ Low-Carbon Awareness under Cap-and-Trade Regulation

Xue

Sun

Yao

2022

IJERPH

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In the era of sustainable development, reducing carbon emissions and achieving carbon neutrality are gradually becoming a consensus for our society. This study explores firms’ incentive mechanisms for carbon emission abatement in a two-echelon supply chain under cap-and-trade regulation, where consumers exhibit low-carbon awareness. To boost the manufacturer’s motivation for abatement, the retailer can provide four incentive strategies, i.e., price-only (PO), cost-sharing (CS), revenue-sharing (RS), and both (cost and revenue) sharing (BS). The equilibrium decisions under the four incentive strategies are obtained by establishing and solving game models. A two-part tariff contract is also proposed to coordinate the low-carbon supply chain. Finally, through comparisons and analyses, we find that: (1) Consumers’ high low-carbon awareness can boost the manufacturer’s incentive for carbon emission abatement (CEA), thus increasing supply chain members’ profits. (2) It is more effective for the retailer to share its revenue to incentivize the manufacturer for abatement than to bear the investment cost of CEA. Thus, Strategy RS is better than Strategy CS and equivalent to Strategy BS. (3) The manufacturer and retailer have consistent incentive strategy preference under cap-and-trade regulation. Both firms prefer the incentive strategy with a higher cooperation level. (4) The incentive strategy with a higher cooperation level can also bring higher eco-social welfare under certain conditions.

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“…Zhang investigated the impact of the carbon tax on enterprise operation and obtained the coopetition supply chain and carbon tax mechanism [30]. Chen et al investigated how a carbon emissions taxation scheme can be designed to reduce carbon emissions [31].…”

Section: Carbon Taxmentioning

confidence: 99%

Study on Green Supply Chain Cooperation and Carbon Tax Policy considering Consumer’s Behavior

Liu

2020

Mathematical Problems in Engineering

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Carbon tax policy has been shown to be an effective incentive for the reduction of carbon emissions, and it also profoundly influences supply chain cooperation. This paper explores the interaction between carbon taxes and green supply chain cooperation. Specifically, we analyze the impact of a carbon tax on green supply chain coordination and further optimize the carbon tax to achieve a win-win situation for both the supply chain and the environment. Because consumer’s behavior has a significant impact on green product demand, we consider the problems above under two types of consumer’s behavior characteristics: consumer’s environmental awareness and consumer’s reference behavior. A game-theoretic model is employed to describe a green supply chain consisting of a manufacturer and a retailer, combining important factors such as the carbon tax rate, green investment coefficient, and degree of reference effect. Then, we obtain the optimal carbon tax rate by balancing the total tax revenue and product greenness. A revenue-sharing contract is introduced to achieve green supply chain coordination, and the impact of the carbon tax on coordination is analyzed. The results show the following. (1) The carbon tax rate and the difference between the power of the manufacturer and retailer are the main factors determining green supply chain coordination. (2) Maximum greenness can be achieved when development costs are higher, while the maximum tax revenue is obtained when the development cost is lower, but with the loss of greenness. (3) If the power of the manufacturer is low, coordination can be achieved under the optimal carbon tax. If the power of the manufacturer is at a medium level, coordination can be achieved by increasing the carbon tax; as a result, increased greenness will be realized, but with the loss of tax revenue. However, when the power of the manufacturer is strong, coordination cannot be achieved. (4) Price reference behavior can promote supply chain coordination, but consumer’s environmental awareness cannot.

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Optimal carbon tax design for achieving low carbon supply chains

Cited by 37 publications

References 60 publications

Impacts of Supply Chain Competition on Firms’ Carbon Emission Reduction and Social Welfare under Cap-and-Trade Regulation

Impacts of Supply Chain Competition on Firms’ Carbon Emission Reduction and Social Welfare under Cap-and-Trade Regulation

Incentive Mechanisms for Carbon Emission Abatement Considering Consumers’ Low-Carbon Awareness under Cap-and-Trade Regulation

Study on Green Supply Chain Cooperation and Carbon Tax Policy considering Consumer’s Behavior

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