IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i4p599-d1340558.html
   My bibliography  Save this article

Carbon Reduction Incentives under Multi-Market Interactions: Supply Chain Vertical Cooperation Perspective

Author

Listed:
  • Xiaohui Huang

    (School of Transportation and Logistics, Southwest Jiaotong University, Chengdu 611756, China)

  • Juan He

    (School of Transportation and Logistics, Southwest Jiaotong University, Chengdu 611756, China
    National Engineering Laboratory of Integrated Transportation Big Data Application Technology, Southwest Jiaotong University, Chengdu 611756, China)

  • Lin Mao

    (School of Transportation and Logistics, Southwest Jiaotong University, Chengdu 611756, China)

Abstract

The greening trend in consumer markets and the marketization and financialization of carbon emission rights have begun to revitalize carbon assets. However, solitary efforts and the spillover of environmental protection effects still hamper enterprises’ enthusiasm for carbon emission reduction. To tackle this challenge, two vertical cooperation mechanisms, cost cooperation and alliance cooperation, are proposed. The mathematical models and solutions are developed for both of the two mechanisms, and their values and applicability are explored, respectively. In addition, the impact of fluctuations in consumer markets, financial markets, and carbon markets on cooperation is examined. The results show that both cooperation models effectively motivate enterprises to enhance carbon reduction and boost market demand. However, cost cooperation may result in inflated product prices and even weaken the profitability of the supply chain. In contrast, alliance cooperation can enhance product price performance and effectively increase supply chain profits. Concerning environmental performance, the initial market is better suited for alliance cooperation, whereas cost cooperation fits the mid-to-late market. The higher financing costs of the financial market and the trading price of the carbon market will strengthen the applicability of cost cooperation. This study offers managerial insights for collaborative decision-making in the context of a multi-market cross-section.

Suggested Citation

  • Xiaohui Huang & Juan He & Lin Mao, 2024. "Carbon Reduction Incentives under Multi-Market Interactions: Supply Chain Vertical Cooperation Perspective," Mathematics, MDPI, vol. 12(4), pages 1-24, February.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:4:p:599-:d:1340558
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/4/599/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/4/599/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhu, Wenge & He, Yuanjie, 2017. "Green product design in supply chains under competition," European Journal of Operational Research, Elsevier, vol. 258(1), pages 165-180.
    2. Wang, Chengfu & Fan, Xiaojun & Yin, Zhe, 2019. "Financing online retailers: Bank vs. electronic business platform, equilibrium, and coordinating strategy," European Journal of Operational Research, Elsevier, vol. 276(1), pages 343-356.
    3. Lin, Boqiang & Jia, Zhijie, 2019. "Impacts of carbon price level in carbon emission trading market," Applied Energy, Elsevier, vol. 239(C), pages 157-170.
    4. 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.
    5. Theißen, Sebastian & Spinler, Stefan, 2014. "Strategic analysis of manufacturer-supplier partnerships: An ANP model for collaborative CO2 reduction management," European Journal of Operational Research, Elsevier, vol. 233(2), pages 383-397.
    6. Georgiadis, Patroklos & Vlachos, Dimitrios, 2004. "The effect of environmental parameters on product recovery," European Journal of Operational Research, Elsevier, vol. 157(2), pages 449-464, September.
    7. Xu, Song & Fang, Lei, 2020. "Partial credit guarantee and trade credit in an emission-dependent supply chain with capital constraint," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 135(C).
    8. Vachon, Stephan & Klassen, Robert D., 2008. "Environmental management and manufacturing performance: The role of collaboration in the supply chain," International Journal of Production Economics, Elsevier, vol. 111(2), pages 299-315, February.
    9. Juanjuan Qin & Yuhui Zhao & Liangjie Xia, 2018. "Carbon Emission Reduction with Capital Constraint under Greening Financing and Cost Sharing Contract," IJERPH, MDPI, vol. 15(4), pages 1-32, April.
    10. Chen, Liang-Hsuan & Kang, Fu-Sen, 2010. "Integrated inventory models considering the two-level trade credit policy and a price-negotiation scheme," European Journal of Operational Research, Elsevier, vol. 205(1), pages 47-58, August.
    Full references (including those not matched with items on IDEAS)

    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. Avinadav, Tal & Levy, Priel, 2023. "The effect of an uncertain commission rate on the decisions of a capital-constrained developer," Operations Research Perspectives, Elsevier, vol. 11(C).
    2. Reza-Gharehbagh, Raziyeh & Hafezalkotob, Ashkan & Makui, Ahmad & Sayadi, Mohammad Kazem, 2022. "Financing green technology development and role of digital platforms: Insourcing vs. outsourcing," Technology in Society, Elsevier, vol. 69(C).
    3. Jingna Ji & Dengli Tang & Jiansheng Huang, 2022. "Green Credit Financing and Emission Reduction Decisions in a Retailer-Dominated Supply Chain with Capital Constraint," Sustainability, MDPI, vol. 14(17), pages 1-26, August.
    4. Yang, Yang & Liu, Jie & Hu, Taizhong, 2023. "Capital allocation and pricing decisions under trade credit with time-sensitive stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).
    5. Dong, Ciwei & Liu, Qingyu & Shen, Bin, 2019. "To be or not to be green? Strategic investment for green product development in a supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 193-227.
    6. Yumin Fu & Jianyun Wu & Cheng Ma & Xiaoyu Fu, 2023. "Agency, Reselling, or Hybrid: Strategic Channel Selection in a Green Supply Chain," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    7. Ata Allah Taleizadeh & Aria Zaker Safaei & Arijit Bhattacharya & Alireza Amjadian, 2022. "Online peer-to-peer lending platform and supply chain finance decisions and strategies," Annals of Operations Research, Springer, vol. 315(1), pages 397-427, August.
    8. Yuanqiao Chen & Zhisong Chen & Jianhui Peng, 2021. "How does emission right-based lending contribute to sustainable production and green financing? A modelling study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13945-13972, September.
    9. Hassini, Elkafi & Surti, Chirag & Searcy, Cory, 2012. "A literature review and a case study of sustainable supply chains with a focus on metrics," International Journal of Production Economics, Elsevier, vol. 140(1), pages 69-82.
    10. Xu, Song & Fang, Lei, 2020. "Partial credit guarantee and trade credit in an emission-dependent supply chain with capital constraint," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 135(C).
    11. Yi Zheng & Gaoxun Zhang & Weiwei Zhang, 2018. "A Duopoly Manufacturers’ Game Model Considering Green Technology Investment under a Cap-and-Trade System," Sustainability, MDPI, vol. 10(3), pages 1-11, March.
    12. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Khalifah, Zainab & Zakuan, Norhayati & Jusoh, Ahmad & Nor, Khalil Md & Khoshnoudi, Masoumeh, 2017. "A review of multi-criteria decision-making applications to solve energy management problems: Two decades from 1995 to 2015," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 216-256.
    13. Priya, Bhawna & Biswas, Indranil & Thürer, Matthias & Avittathur, Balram, 2023. "How to finance the supply chain when you are small? Clearance sale and loan payment timing in financially constrained supply chains," International Journal of Production Economics, Elsevier, vol. 263(C).
    14. Jin, Wei & Ding, Wen & Yang, Jun, 2022. "Impact of financial incentives on green manufacturing: Loan guarantee vs. interest subsidy," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1067-1080.
    15. Doo-Ho Lee & Jong-Chul Yoon, 2022. "Decisions on Pricing, Sustainability Effort, and Carbon Cap under Wholesale Price and Cost-Sharing Contracts," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    16. Du, Shaofu & Huang, Chong & Yan, Xia & Tang, Wenzhi, 2024. "Voluntary green technology adoption: The effects of regulatory uncertainty and competition," European Journal of Operational Research, Elsevier, vol. 315(2), pages 528-540.
    17. Liu, Lu & Feng, Lipan & Jiang, Tao & Zhang, Qian, 2021. "The impact of supply chain competition on the introduction of clean development mechanisms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    18. Ming Zhang & Jianjun Zhu & Hehua Wang & Pei Liu, 2019. "Evolutionary Game Analysis on Strategies in “Main Manufacturer–Supplier” Mode Considering Technology Docking and Price Concluding under Competition Condition," Mathematics, MDPI, vol. 7(12), pages 1-25, December.
    19. Qin, Juanjuan & Fu, Huiping & Wang, Ziping & Xia, Liangjie, 2021. "Financing and carbon emission reduction strategies of capital-constrained manufacturers in E-commerce supply chains," International Journal of Production Economics, Elsevier, vol. 241(C).
    20. Dooho Lee, 2020. "Who Drives Green Innovation? A Game Theoretical Analysis of a Closed-Loop Supply Chain under Different Power Structures," IJERPH, MDPI, vol. 17(7), pages 1-26, March.

    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:gam:jmathe:v:12:y:2024:i:4:p:599-:d:1340558. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.