Carbon emissions reduction and transfer in supply chains under a cap-and-trade system with emissions-sensitive demand

Research output: Contribution to journalArticle

Authors

  • Yunlong Liu
  • Chengfeng Huang
  • Qiankun Songa
  • Gendao Li
  • Yu Xiong

External departments

  • Chongqing Jiaotong University

Details

Original languageEnglish
Pages (from-to)37-44
Number of pages8
JournalSystems Science and Control Engineering
Volume6
Issue number2
Early online date16 Aug 2018
DOIs
Publication statusPublished - 2018
Publication type

Research output: Contribution to journalArticle

Abstract

Although ‘Cap-and-trade’ mainly constrains the manufacturer, the decision of the manufacturer’s emission reduction will affect the decision of the whole supply chain. In this paper, we investigate manufacturer and retailer’s decision under decentralized decision and centralized decision and taking into account the impact of carbon price and consumer environmental consciousness. Specially, we analyse the condition of whether a manufacturer transfers the emission reduction task to retailer. Besides, we use computational experiments to analyse the sensitivity by changing the cost function. Through the research, we have some findings: under a decentralized decision, manufacturer transfers emissions reduction task in more times, if the manufacturer transfers the emissions reduction task, the effectiveness of the emissions reduction, demand, retailer’s revenue per product and consumer welfare decrease. Under centralized decision, the manufacturer does not transfer emissions reduction task all time, which is affected by emissions reduction cost of the manufacturer and retailer, carbon price and consumer environmental consciousness. In addition, emissions reduction cost function is not the sensitivity factor.

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