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Effects of Carbon Policy on Carbon Emission Reduction in Supply Chain under Uncertain Demand

Author

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  • Changhong Li

    (School of Economics and Management, Shanxi University, Taiyuan 030006, China)

  • Jialuo Wang

    (School of Economics and Management, Shanxi University, Taiyuan 030006, China)

  • Jiao Zheng

    (School of Economics and Management, Shanxi University, Taiyuan 030006, China)

  • Jiani Gao

    (School of Economics and Management, Shanxi University, Taiyuan 030006, China)

Abstract

Although there are many articles on carbon emission reduction of sustainable supply chain, most of them study the carbon emission reduction efficiency of supply chain in the case of single carbon policy or demand determination. Based on previous studies, this paper considered a supply chain consisting of a single manufacturer and a single retailer in an uncertain demand market. The effects of demand randomness and different carbon policies on carbon emission reduction level and optimal decision in supply chain were studied by constructing mean-variance utility function and Stackelberg game. Due to the difficulty of data acquisition, this paper verified the equalization results by numerical simulation. The results show that: (1) cap-and-trade policy, government subsidy policy and carbon tax policy can promote the carbon emission reduction investment of supply chain, while carbon tax policy will lead to the decline of the overall profit of supply chain; (2) For the manufacturer and the retailer, adopting a strategy with a low degree of risk avoidance will increase its own profits; (3) For the supply chain as a whole, it is more advantageous for manufacturers to adopt higher risk avoidance strategies, while retailers to adopt lower risk avoidance strategies. In addition, in the conclusion, this paper puts forward management implications related to stakeholders, thus providing help for the development of sustainable supply chain.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:9:p:5548-:d:808898
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    References listed on IDEAS

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