IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i12p4345-d184734.html
   My bibliography  Save this article

Cost-Sharing Mechanisms for A Wood Forest Product Supply Chain under Carbon Cap-and-Trade

Author

Listed:
  • Mingjun Sun

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

  • Hongjun Peng

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

  • Shuai Wang

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

Abstract

We consider a wood forest product supply chain consisting of a forestry company and a wood forest products manufacturer, where the forestry company produces timber and forestry carbon sinks, and the manufacturer consumes timber and carbon emission rights. A Stackelberg model is adopted to investigate the forest scale and carbon emission reduction decisions of the supply chain. We design and analyze the carbon emission reduction cost-sharing (ERCS) mechanism and carbon sink cost-sharing (SCS) mechanism, respectively. The result shows that both contracts can help the wood forest product supply chain to achieve higher profits. The ERCS mechanism may encourage the manufacturer to increase emission reduction level and the forestry company to expand the forest scale. The SCS mechanism is beneficial to the expansion of carbon sink forests; however, it may lead to the manufacturer decreasing investment in carbon emission reduction measures.

Suggested Citation

  • Mingjun Sun & Hongjun Peng & Shuai Wang, 2018. "Cost-Sharing Mechanisms for A Wood Forest Product Supply Chain under Carbon Cap-and-Trade," Sustainability, MDPI, vol. 10(12), pages 1-19, November.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4345-:d:184734
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/12/4345/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/12/4345/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Daniels, 2010. "Integrating Forest Carbon Sequestration Into a Cap-and-Trade Program to Reduce Net CO Emissions," Journal of the American Planning Association, Taylor & Francis Journals, vol. 76(4), pages 463-475.
    2. Johanna Pohjola & Leena Kerkel� & Raisa M�kip��, 2003. "Credited forest carbon sinks: how the cost reduction is allocated among countries and sectors," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 445-461, December.
    3. Newell, Richard G. & Stavins, Robert N., 2000. "Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 211-235, November.
    4. Timothy Pearson & Sandra Brown & Brent Sohngen & Jennifer Henman & Sara Ohrel, 2014. "Transaction costs for carbon sequestration projects in the tropical forest sector," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(8), pages 1209-1222, December.
    5. Nouira, Imen & Hammami, Ramzi & Frein, Yannick & Temponi, Cecilia, 2016. "Design of forward supply chains: Impact of a carbon emissions-sensitive demand," International Journal of Production Economics, Elsevier, vol. 173(C), pages 80-98.
    6. Yang, Lei & Zhang, Qin & Ji, Jingna, 2017. "Pricing and carbon emission reduction decisions in supply chains with vertical and horizontal cooperation," International Journal of Production Economics, Elsevier, vol. 191(C), pages 286-297.
    7. Gren, Ing-Marie & Carlsson, Mattias, 2013. "Economic value of carbon sequestration in forests under multiple sources of uncertainty," Journal of Forest Economics, Elsevier, vol. 19(2), pages 174-189.
    8. Zhou, Wei & Gao, Lan, 2016. "The impact of carbon trade on the management of short-rotation forest plantations," Forest Policy and Economics, Elsevier, vol. 62(C), pages 30-35.
    9. Bin Wu & Wanying Huang & Pengfei Liu, 2017. "Carbon Reduction Strategies Based on an NW Small-World Network with a Progressive Carbon Tax," Sustainability, MDPI, vol. 9(10), pages 1-22, September.
    10. Lei Yang & Yufan Chen & Jingna Ji, 2018. "Cooperation Modes of Operations and Financing in a Low-Carbon Supply Chain," Sustainability, MDPI, vol. 10(3), pages 1-25, March.
    11. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    12. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ye Song & Hongjun Peng, 2019. "Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies," Sustainability, MDPI, vol. 11(17), pages 1-13, August.
    2. Ma Zhong & Rong Xu & Xinyi Liao & Shuangli Zhang, 2019. "Do CSR Ratings Converge in China? A Comparison Between RKS and Hexun Scores," Sustainability, MDPI, vol. 11(14), pages 1-20, July.
    3. Xinyue Yang & Ye Song & Mingjun Sun & Hongjun Peng, 2020. "Strategies for Capital Constrained Timber and Carbon Sink Supply Chain under the Cap-and-Trade Scheme," Sustainability, MDPI, vol. 12(11), pages 1-15, May.
    4. Bowen Da & Chuanzhe Liu & Nana Liu & Yufei Xia & Fangming Xie, 2019. "Coal-Electric Power Supply Chain Reduction and Operation Strategy under the Cap-and-Trade Model and Green Financial Background," Sustainability, MDPI, vol. 11(11), pages 1-17, May.
    5. Wen Jiang & Wenfei Lu & Qianwen Xu, 2019. "Profit Distribution Model for Construction Supply Chain with Cap-and-Trade Policy," Sustainability, MDPI, vol. 11(4), pages 1-24, February.

    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. Xinyue Yang & Ye Song & Mingjun Sun & Hongjun Peng, 2020. "Strategies for Capital Constrained Timber and Carbon Sink Supply Chain under the Cap-and-Trade Scheme," Sustainability, MDPI, vol. 12(11), pages 1-15, May.
    2. Changhong Li & Jiani Gao & Jiaqi Guo & Jialuo Wang, 2022. "Low-Carbon Supply Chain Decisions Considering Carbon Emissions Right Pledge Financing in Different Power Structures," Energies, MDPI, vol. 15(15), pages 1-22, August.
    3. Weisheng Deng & Lu Liu, 2019. "Comparison of Carbon Emission Reduction Modes: Impacts of Capital Constraint and Risk Aversion," Sustainability, MDPI, vol. 11(6), pages 1-30, March.
    4. Bowen Da & Chuanzhe Liu & Nana Liu & Yufei Xia & Fangming Xie, 2019. "Coal-Electric Power Supply Chain Reduction and Operation Strategy under the Cap-and-Trade Model and Green Financial Background," Sustainability, MDPI, vol. 11(11), pages 1-17, May.
    5. Gren, Ing-Marie, 2024. "A trading market for uncertain carbon removal by land use in the EU," Forest Policy and Economics, Elsevier, vol. 159(C).
    6. Yang, Huixiao & Luo, Jianwen & Wang, Haijun, 2017. "The role of revenue sharing and first-mover advantage in emission abatement with carbon tax and consumer environmental awareness," International Journal of Production Economics, Elsevier, vol. 193(C), pages 691-702.
    7. Chen, Wenbo, 2018. "Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharingAuthor-Name: Yang, Huixiao," Omega, Elsevier, vol. 78(C), pages 179-191.
    8. Xianliang Shi & Genzhu Li & Ciwei Dong & Yefei Yang, 2020. "Value Co-Creation Behavior in Green Supply Chains: An Empirical Study," Energies, MDPI, vol. 13(15), pages 1-26, July.
    9. Wen Jiang & Wenfei Lu & Qianwen Xu, 2019. "Profit Distribution Model for Construction Supply Chain with Cap-and-Trade Policy," Sustainability, MDPI, vol. 11(4), pages 1-24, February.
    10. Xu, Xiaoping & Yang, Yuanyuan & Zhang, Juzhi & Cheng, T.C.E., 2023. "Live streaming platform operations and coordination under the cap-and-trade regulation: Platform-enabled mode versus platform-agency mode," International Journal of Production Economics, Elsevier, vol. 260(C).
    11. Xu, Xiaoping & Guo, Shunan & Cheng, T.C.E. & Du, Pengcheng, 2023. "The choice between the agency and reselling modes considering green technology with the cap-and-trade scheme," International Journal of Production Economics, Elsevier, vol. 260(C).
    12. Faqi Xie & Yushuang Deng & Huiru Chen, 2023. "Pricing and Quantity Decisions under Asymmetric Carbon Emission Reduction Information and Cap-and-Trade Mechanism," IJERPH, MDPI, vol. 20(3), pages 1-27, January.
    13. Kelei Xue & Guohua Sun & Tongtong Yao, 2022. "Incentive Mechanisms for Carbon Emission Abatement Considering Consumers’ Low-Carbon Awareness under Cap-and-Trade Regulation," IJERPH, MDPI, vol. 19(7), pages 1-27, March.
    14. 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).
    15. Luo, Ruiling & Zhou, Li & Song, Yang & Fan, Tijun, 2022. "Evaluating the impact of carbon tax policy on manufacturing and remanufacturing decisions in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 245(C).
    16. Changhong Li & Jialuo Wang & Jiao Zheng & Jiani Gao, 2022. "Effects of Carbon Policy on Carbon Emission Reduction in Supply Chain under Uncertain Demand," Sustainability, MDPI, vol. 14(9), pages 1-20, May.
    17. 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.
    18. Zhimin Wei & Yun Huang, 2022. "Supply Chain Coordination under Carbon Emission Tax Regulation Considering Greening Technology Investment," IJERPH, MDPI, vol. 19(15), pages 1-27, July.
    19. Zhitao Xu & Adel Elomri & Shaligram Pokharel & Fatih Mutlu, 2019. "The Design of Green Supply Chains under Carbon Policies: A Literature Review of Quantitative Models," Sustainability, MDPI, vol. 11(11), pages 1-20, May.
    20. Wen Cheng & Qunqi Wu & Fei Ye & Qian Li, 2022. "The Impact of Government Interventions and Consumer Green Preferences on the Competition between Green and Nongreen Supply Chains," Sustainability, MDPI, vol. 14(10), pages 1-34, May.

    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:jsusta:v:10:y:2018:i:12:p:4345-:d:184734. 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.