Abstract
With the significant increase of fossil energy consumption and the ever-worsening pollution of environment, low-carbon development becomes an inevitable choice. Carbon finance can help firms alleviate the finance pressure from carbon emission reduction. This research explores two financing methods, delay-in-payment and bank loan; and two cooperation decisions, carbon emission reduction cooperation and price cooperation. Four scenarios are considered: non-cooperation, partial-cooperation delay-in-payment, supply chain carbon finance (SCCF), and full-cooperation. We discuss how firms make their pricing and carbon emission reduction decisions under different cooperative levels and financing methods. For a manufacturer-dominated supply chain, the results show that SCCF will help the small and medium enterprise seek cooperation with the monopoly manufacturer, and improve supply chain’s profit compared to green loan. What’s more, SCCF pattern can effectively control the total carbon emission. In addition, we extend the model to consider the retailer-dominated case. The results show that SCCF pattern can help increase the emission reduction rate of the whole supply chain. From the perspective of emission reduction efficiency, it is better for the government to promote the SCCF mode in the retailer-dominated supply chain.
Highlights
Productivity has increased significantly since the second industrial revolution, and with this the consumption of resources keeps on growing
Under supply chain carbon finance (SCCF), the manufacturer and the retailer cooperate in carbon emission reduction
We study the impact of different financial methods and cooperative levels on the supply chain profit and reduction rate
Summary
Productivity has increased significantly since the second industrial revolution, and with this the consumption of resources keeps on growing. The emission of greenhouse gases is rising dramatically, which leads to a series of climate changes and becomes a threat to the ecological environment. The Kyoto Protocol (http://unfccc.int/resource/docs/convkp/kpchinese.pdf) (1997) has established three flexible cooperative mechanisms to reduce emissions, which impels greenhouse gas emissions to become trading goods. As the carbon trading market becomes mature, carbon quotas have gradually developed into liquid assets with investment value. The Paris Agreement (https://unfccc.int/resource/docs/2015/cop21/chi/l09c.pdf) (2015) is the third milestones for carbon emissions reduction. It puts forward a target that the increase of global average temperature should fell below 2 ◦C. Carbon policies and carbon reduction will have greater influences on firms’ operations
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