Achieve a low carbon supply chain through product mix

In low-carbon environments, asymmetric carbon information causes the enterprises in a supply chain to face the risk of misstatements about carbon emissions. Such misstatements could affect the decisions about carbon emission transfers in the supply chain. To optimize carbon emission transfers among supply chain enterprises, this study formulates a supplier-led Stackelberg game model incorporating the government’s initial carbon emission allowances and fines. The study also examines the mechanism of the behaviors of enterprises in low-carbon supply chains, the proportions of initial quotas, the impact of government fines on carbon transfers, and the influence of the supply chain and carbon emission transfers on related supply chain decisions and profits. The main findings are as follows. First, the proportion of the government’s initial quota has a positive effect on the carbon emission transfer quantity of the supplier, while government fines and misstatement factors have a negative effect. Second, the carbon emissions of the unit product of the supplier decrease as the under-reporting factor and carbon emission transfer quantity of the supplier increase. The under-reporting factor has a stronger effect on the carbon emissions of the unit product. Third, in a carbon-free market, carbon emission transfers negatively affect the disclosed profits of the supply chain, whereas in a perfect carbon market, the carbon trading price has a certain endogenous regulation mechanism for the suppliers’ operational decisions. Fourth, the supplier’s wholesale price order quantity is negatively correlated with the supplier’s carbon emission transfer quantity, but positively correlated with the initial carbon quota ratio.

Supply chain enterprise operations and government carbon tax decisions considering carbon emissions

PurposeThe purpose of this paper is to review the relevant literature on low carbon supply chain management (LCSCM) and classify it on contextual base. It also aims at identifying key decision-making issues in LCSCM. This paper also highlights some of the future challenges and scope of research in this domain.Design/methodology/approachA content analysis is carried out by systematically collecting the literature from major academic sources over a period of 18 years (2000-2017), identifying structural dimensions and classifying it on contextual base.FindingsThere is an increasing trend of research on LCSCM, but this research is still in a nascent stage. All supply chain functions such as supplier selection, inventory planning, network design and logistic decisions have been redefined by integrating emissions-related issues.Research limitations/implicationsLimitation of this study is inherent in its unit of analysis. Only peer-reviewed journal articles published in English language have been considered in this study.Practical implicationsFindings of prior studies on low carbon inventory control, transportation planning, facility allocation, location selection and supply chain coordination have been highlighted in this study. This will help supply chain practitioners in decision making.Originality/valueThough there are an increasing number of studies about carbon emission-related issues in supply chain management, the present literature lacks to provide a review of the overarching publications. This paper addresses this gap by providing a comprehensive review of literature on emissions-related issues in supply chain management.

Climate change is mainly caused by excessive emissions of carbon dioxide and other greenhouse gases. In order to reduce carbon emissions, cap and trade policy is implemented by governments in many countries, which has significant impacts on the decisions of companies at all levels of the low carbon supply chain. This paper investigates the decision-making and coordination of a low carbon supply chain consisting of a low carbon manufacturer who produces one product and is allowed to invest in green technology to reduce carbon emissions in production and a retailer who faces stochastic demands formed by homogeneous strategic customers. We investigate the optimal production, pricing, carbon trading, and green technology investment strategies of the low carbon supply chain in centralized (including Rational Expected Equilibrium scenario and quantity commitment scenario) and decentralized settings. It is demonstrated that quantity commitment strategy can improve the profit of the low carbon supply chain with strategic customer behavior. We also show that the performance of decentralized supply chain is lower than that of quantity commitment scenario. We prove that the low carbon supply chain cannot be coordinated by revenue sharing contract but by revenue sharing-cost sharing contract.

Under a carbon tax, with the constraint of carbon emissions reduction, by establishing game theoretical models for a low-carbon supply chain, the article investigates how the carbon tax rate and risk aversion degree may affect retail price, product carbon emission degree, and profits of the manufacturer, the retailer, and the entire supply chain. The results show that product carbon emission degree and supply chain profit in a centralized supply chain are higher than those in a decentralized supply chain. With a risk-averse manufacturer, the product’s carbon emission degree and supply chain profit will further decrease. With increased risk aversion, the manufacturer's profit and total channel profit will decrease, but the retailer's profit will be affected by the carbon tax rate. Carbon reduction investment cost-sharing contracts can contribute to the implementation of increased demand for low-carbon products and decreased retail prices. Regardless of whether the manufacturer is risk-averse, a carbon reduction investment cost-sharing contract can increase the overall efficiency and profit of the supply chain. Finally, the results are verified by numerical examples.

Methane emissions along biomethane and biogas supply chains are underestimated

Many small and medium enterprises (SMEs) with capital constraints often have no access or find it costly to obtain a loan from a bank; the retailer tends to borrow money from other enterprises in the supply chain by trade credit financing. We consider an emission-dependent supply chain with one emission-dependent manufacturer and one capital-constrained retailer in need of financing to explore the optimal operational and environmental strategies of a low-carbon supply chain under trade credit financing. We use a Stackelberg game model to depict the low-carbon supply chain. We analyse the optimal carbon-emission reduction effort, wholesale price, and order quantity in the equilibrium state. The impacts of key parameters, such as the retailer’s internal working capital, the manufacturer’s risk-aversion degree, and the carbon-trading price on the supply chain operation, are analysed. The results show that the retailer’s capital constraint causes the carbon-emission reduction effort, wholesale price, and order quantity to improve synchronously. The supply chain achieves a win-win outcome for both the manufacturer and the retailer when the capital-constrained retailer is funded via trade credit from the manufacturer. The in-depth development of financing is beneficial to the manufacturer but is a disadvantage for the retailer. When the initial carbon-emission quota is low, the manufacturer benefits from a relatively lower carbon-trading price. Otherwise, a higher carbon-trading price is better for the manufacturer. The “carbon-trading price trap” ensures that the retailer’s profit is minimal. We further investigate the scenario in which the manufacturer is risk averse and find that the retailer will purchase fewer products and that the manufacturer will gain less profit to decrease the carbon-emission reduction effort. The manufacturer’s risk aversion is unfavourable to both the economic and environmental outcomes of the whole supply chain. This research provides strategic support for a low-carbon supply chain to carry out operational decisions in the context of enterprise capital constraint. To examine the theoretical results, the data used in the existing literature are further used to simulate the corresponding conclusions. Our research enriches the existing supply chain finance literature and provides decision support for the supply chain core enterprise.

PurposeThis paper aims to discuss the low carbon supply chain practices in China’s textile industry. To curb greenhouse gas emissions, the Chinese government has launched restrict regulatory system and imposed the energy consumption constraint in the textile industry to guarantee the achievability of low carbon economy. The authors aim to examine how the energy consumption constraint affects the optimal decisions of the supply chain members and address the supply chain coordination issue.Design/methodology/approachThe authors conduct two case studies from Chinese textile companies and examine the impact of energy consumption constraints on their production and operations management. Based on the real industrial practices, the authors then develop a simple analytical model for a low carbon supply chain in which it consists of one single retailer and one single manufacturer, and the manufacturer determines the choice of clean technology for energy efficiency improvement and emission reduction.FindingsFrom the case studies, the authors find that the textile companies develop clean technologies to reduce carbon emission in production process under the energy consumption enforcement. In this analytical model, the authors derive the optimal decisions of the supply chain members and reveal that supply chain coordination can be achieved if the manufacturer properly sets the reservation wholesale price (WS) despite the production capacity can fulfill partial market demand under a WS (or cost sharing) contract. The authors also find that the cost-sharing contract may induce the manufacturer to increase the investment of clean technology and reduce the optimal WS.Originality/valueThis paper discusses low carbon supply chain practices in China’s textile industry and contributes toward green supply chain development. Managerial implications are identified, which are beneficial to the entire textile industry in the developing countries.

With the increasingly serious global carbon emission problem, how to reduce carbon emissions has attracted a great deal of attention from academics and practitioners. Carbon emissions can be decreased more efficiently by coordinating the management of firms upstream and downstream in the supply chain, which has an increasingly important role in the low carbon process. Research on the low carbon supply chain (LCSC) has gradually evolved into important branches of global sustainable development. This paper aims to conduct a complete thematic analysis of 754 articles published between 2012 and 2021, identify the structural dimensions of evolution, and classify them according to systematic methodology. It provides a stage-by-stage summary of relevant research results from the past decade. At present, research in the LCSC field has resulted in a complete theoretical framework and research system and has formed the evolutionary path of method-policy-practice research. This study will help to promote further in-depth study of the LCSC and the fabrication and improvement of its theoretical system. It provides a valuable reference for researchers interested in LCSC, and points out the focus and direction of future research.

Carbon emissions were one of the most critical contributors to climate change, and the recent climate agreement had agreed for all participating countries to reduce their emissions. Malaysia has pledged to reduce 45 per cent of its carbon emissions by 2025. However, reducing carbon emissions from the industry was still limited due to voluntary reporting, particularly among manufacturers. Thus, it is ambitious for the Malaysian government to achieve its target by 2025. A complete review is performed to go through the literature and determine the review's research path. This review aims to investigate the low carbon performance based on the manufacturing industry's low carbon supply chain practices. The findings show that low carbon production was insignificant in reducing overall carbon emissions. In contrast, the rest of the low carbon supply chain practices were by the Natural Resource-Based-View (NRBV) theory. It helps to identify companies' low carbon supply chain practices to reduce carbon emissions and meet environmental regulations. Additionally, the review also provided new insight into mediating effect that contributes to the organizational theory of NRBV. The theoretical hypotheses were tested with bias-corrected and accelerated (BCA) bootstrap confidence intervals. The instrument used in this review is a questionnaire, and the questionnaire consists of five (5) scales which tapped on (LCSCM), energy management, and low carbon performance. Responses from the respondent were collected via an online survey between Malaysian manufacturing industries. SmartPLS was used to perform the model and structural analyses. The result shows that LCSCM influence carbon performance directly and indirectly, so the hypotheses are supported. This review is one of the earliest attempts to record empirical evidence regarding companies’ low carbon supply chain practices and performance. Thus, the review shows results can be used and extended to develop low-carbon supply chain frameworks.

In this study, we aimed to understand the role of integrity in low carbon supply chain and their benefits towards firm performance and corporate governance. This paper also discussed the importance of Board of Director (BoD) in decision making in the supply chain. As stakeholders continue to increasingly emphasize integrity practices in their supply chains, the firm should understand and practice the integrity especially involved low carbon supply chain (LCSC) by provided accurate carbon disclosure and report carbon verification and etc. This is important to shareholder especially Board of Director to make sure the firm performance meet their expectation. By monitoring the decision making in the low carbon supply chain, the BoD believe can avoid unethical issues such as corruption, manipulation and fraud. Practising integrity in the supply chain, the firm will obtain many advantages in their firm performance. The firm’s performance will increase other than being more trustable and gain competitive advantages from the competitor. The BoD is concern about the impact of decision making on society. The BoD believe by being integrity in the firm’s management they will meet the social expectation.

In this study, we aimed to understand the role of integrity in low carbon supply chain and their benefits towards firm performance and corporate governance. This paper also discussed the importance of Board of Director (BoD) in decision making in the supply chain. As stakeholders continue to increasingly emphasize integrity practices in their supply chains, the firm should understand and practice the integrity especially involved low carbon supply chain (LCSC) by provided accurate carbon disclosure and report carbon verification and etc. This is important to shareholder especially Board of Director to make sure the firm performance meet their expectation. By monitoring the decision making in the low carbon supply chain, the BoD believe can avoid unethical issues such as corruption, manipulation and fraud. Practising integrity in the supply chain, the firm will obtain many advantages in their firm performance. The firm’s performance will increase other than being more trustable and gain competitive advantages from the competitor. The BoD is concern about the impact of decision making on society. The BoD believe by being integrity in the firm’s management they will meet the social expectation.

Under a carbon tax, this study established game theory models of a low-carbon supply chain to investigate the effects of fairness and carbon tax rate on the retail price and on carbon emission reduction level, as well as on the profits of the manufacturer, retailer and the whole supply chain. Results show that the carbon emission reduction level and the supply chain profit under a centralized supply chain are both higher than those under a decentralized supply chain, if the manufacturer’s fairness concern, the carbon emission reduction level and the supply chain profit will further decrease, but manufacturers’ profits are taking a growing share of the supply chain’s total profits. Under three different modes, the carbon emission reduction level will increase with the increase of the carbon coefficient. The retail price and the supply chain profit are jointly determined by the carbon tax rate and the carbon coefficient. Moreover, the implementation of a carbon reduction investment cost-sharing contract can increase the demand of low-carbon products and reduce the retail price. Under a carbon tax, regardless of whether manufacturers pay attention to fairness, the carbon reduction investment cost-sharing contract can effectively improve the overall efficiency of the low-carbon supply chain.

A low-carbon supply chain is generally a clean practice to achieve carbon peak and neutralization; it transforms supply chain management into a green economy, aiming to reduce energy consumption, reduce pollution and achieve sustainable development in all parts of the supply chain. However, there are few specific reviews of low-carbon supply chains to date. Therefore, this article provides a comprehensive analysis of the literature on low-carbon supply chains, explores the current knowledge system, evolution trend of topics, and future research directions, and enriches the green economy framework. A systematic analysis was conducted using bibliometric and content analysis. Up to 1,811 articles from 2003 to 2021 were selected, discussed, and analyzed. This study found that the low carbon supply chain is a growing research topic. Some influential authors, the geographical distribution of articles, and subject categories in this field were also identified. Next, five clusters, which are logistics management, carbon accounting, driving forces, sustainability management, and barriers, were defined using exhaustive content analysis. The evolution trend of significant topics, mainly including global value chain, additive manufacturing, deterioration, and decarbonization, was explored. Finally, we proposed a future research agenda for low-carbon supply chains and further deepened the green economy’s knowledge structure.

Blockchain technology has reshaped how members of supply chains transfer information, effectively avoiding the phenomenon of information silos and helping to improve the emissions reduction performance and profit of each subject in the supply chain. It is now critical to understand how supply chain members can be encouraged to collaboratively invest in low-carbon service platforms based on blockchain technology to realise chain-wide systematic carbon reduction. In this regard, considering the time-dynamic characteristics of enterprise emissions reduction, this paper establishes a differential game model of collaborative emissions reduction in a low-carbon supply chain composed of a Stackelberg leader manufacturer and a supplier. We compare and analyse the four investment decision scenarios regarding whether the supplier and manufacturer invest in the blockchain low-carbon service platform under decentralised decision-making, as well as the equilibrium solutions of supply chain members under centralised decision-making scenarios by solving the Hamilton function. Finally, we introduce a bilateral cost-sharing contract to make the supply chain perfectly coordinated. We find that the significant unit return is an important incentive for supply chain members to take the lead in investing in a low carbon service platform (LCSP). In this regard, when only one member invests, the other one demonstrates free-riding behaviour. Under centralised decision-making, the supply chain can achieve Pareto optimality, and the bilateral cost-sharing contract can achieve perfect coordination of the supply chain, which is the best choice for the decision-makers of low-carbon supply chains. As the influence level of the LCSP gradually increases from small to large, the optimal decision-making of supply chain members gradually transitions from waiting for the right time to “hitchhike” to a strong willingness to cooperate. This study is of great reference value and practical significance for economic entities to improve profits, promote systematic carbon reduction in the whole chain and promote the sustainable development of low-carbon supply chains.