Guest editorial: Carbon emissions trading and supply chain, information disclosure, and sustainability reporting assurance

Blockchain solutions for carbon markets are nearing maturity

In the recent decades, carbon footprint assessment of an activity has been emerging as a major research area. The carbon trading called “CAP and TRADE system” is evolved out of the Kyoto Protocol and emission trading schemes and is experimented across countries to encourage organizations to control emission. The region or country fixes the CAP which is the limit for emissions emitted by an organization. This chapter depicts the performance evaluation of a supply chain under the carbon cap and trade scheme. A mathematical model is proposed which considers carbon emissions as a result of supply chain operation, carbon trading among members of the supply chain, and carbon trading with members of outside supply chain. A mixed integer linear programming (MILP) model is proposed for the performance evaluation of a forward supply chain having 4 stages. The analysis shows that carbon trading allows economic benefits as well as environmental benefits.

This paper considers a carbon emission cap and trade market, where the carbon emission cap for each entity (either government or firm) is allocated first and then the carbon trading price is decided interdependently in the carbon trading market among the non-cooperative entities which make their production decision. We assume that there are n entities emitting carbon during the production process. After allocating the carbon (emission) cap for each participating entity in the carbon cap and trade market, each participant makes a production decision using the Newsvendor model given carbon trading price determined in the carbon trading market and trades some amount of its carbon emission, if its carbon emission is below or above its own carbon cap. Here, the carbon trading price depends on how carbon caps over the entities are allocated, since the carbon trading price is determined through the carbon (emission) trading market, which considers total amount of carbon emission being equal to total carbon caps over entities and some fraction of total carbon emission should be from each entity participating in the carbon cap and trade market. Thus, we can see the interdependency among the production decision, carbon cap and carbon trading price. We model this as a non-cooperative Stackelberg game in which carbon cap for each entity is allocated in the first stage and each entity’s production quantity is decided in the second stage considering the carbon trading price determined in the carbon trading market. First, we show the monotonic property of the carbon trading price and each entity’s production over the carbon cap allocation. In addition, we show that there exists an optimality condition for the carbon cap allocation. Using this optimality condition, we provide various results for carbon cap and trade market.

How carbon emission trading mechanism and supply chain digitization affect manufacturing enterprises’ competitiveness? Evidence from China

Industrial parks, characterized by the clustering of multiple factories and interconnected energy sources, require optimized operational strategies for their Integrated Energy Systems (IES). These strategies not only aim to conserve energy for industrial users but also relieve the burden on the power supply, reducing carbon emissions. In this context, this paper introduces an optimization strategy tailored to clustered factories, considering the incorporation of carbon trading and supply chain integration throughout the entire production process of each factory. First, a workshop model is established for each factory, accompanied by an energy consumption model that accounts for the strict sequencing of the production process and supply chain integration. Furthermore, energy unit models are devised for the IES and then a low-carbon and economically optimized scheduling model is outlined for the IES within the industrial park, aiming to minimize the total operational cost, including the cost of carbon trading. Finally, case studies are conducted within a paper-making industrial park located in the Zhejiang Province. Various scenarios are compared and analyzed. The numerical results underscore the model’s economic and low-carbon merits, and it offers technical support for energy conservation and emission reduction in paper-making fields.

On the basis of the latest input–output data, this paper estimates the amount of embodied carbon emissions in inter-regional trade by constructing a multiregional input–output model to evaluate how environmental regulation stringency influences its spatial transfer. We found that environmental regulation stringency had significant positive correlation with transferring out embodied carbon emissions in trade at the national level, and a significant negative correlation with transferring in embodied carbon emissions in trade. In East and Central China, effective environmental regulation observably improves the issue of carbon emissions caused by trade, while in the western region, environmental regulation stringency had significant positive correlation with transferring in and out embodied carbon emissions in inter-regional trade. For that reason, we further use the geographically weighted regression model (GWR) to assess the spatial evolution characteristics of the intensity of environmental regulation on the transfer of embodied carbon emissions in trade; thereby, the above results are verified and show that environmental regulation has failed to play its due role.

Designing an eco-efficient supply chain network considering carbon trade and trade-credit: A robust fuzzy optimization approach

Demand information acquisition and disclosure in a non-instantaneous deteriorating items supply chain

Purpose The construction industry, contributing approximately 39% of global carbon emissions, faces challenges to reach net-zero emissions by 2050. Traditional methods for estimating and managing carbon emissions suffer from inaccuracies, low transparency and data integrity issues, highlighting the need for trustworthy and efficient solutions. This paper aims to demonstrate how blockchains can enhance the accuracy of tracking carbon emissions and streamlining carbon trading, providing a robust system to manage and reduce carbon emissions effectively. Design/methodology/approach A case study-based approach is adopted to develop a blockchain-based system (EcoConstruct) to track carbon emissions and circularity of construction materials and facilitate carbon trading in the industry. The implementation uses smart contract technology and the Beneficial Assets Ownership protocol in the Tezos blockchain to validate carbon emission tracking, carbon trading and circularity criteria. The system was evaluated and validated through expert feedback, ensuring its practical applicability and effectiveness. Findings EcoConstruct demonstrates advancements in transparency, data integrity and efficiency in carbon estimation and trading. The system’s immutable ledger securely stores carbon emissions and their compensations using non-fungible tokens called carbon rewards. This system facilitates transparent and accountable carbon trading among stakeholders (clients, contractors and material suppliers). The findings highlight the potential of blockchains to overcome current challenges in carbon emissions management and trading in the construction industry. Originality/value EcoConstruct provides a novel blockchain-based solution for managing carbon emissions and promoting sustainability in construction, moving beyond conceptualisation by leveraging blockchain’s decentralisation, immutability, transparency and security to enhance carbon estimation accuracy and streamline carbon trading.

Carbon trading volume and price forecasting in China using multiple machine learning models

Carbon markets devolve governance to external institutions and displace power from sovereign states. Major producers in these markets, notably China, have expressed concern about the adverse implications for national interests and sovereignty associated with selling off the rights to emit carbon emissions abroad. This article suggests that such concern has shaped the discursive context in which emission trading schemes have gained popularity in the country. Our discourse analysis shows that notions of market power are made manifest as a powerful storyline. In the Chinese language, “power,” “sovereignty,” and “rights” all use the same character. The storyline captures all these expressions and allows for a positive view about active engagement in carbon trading as a way to protect development rights and redeem carbon sovereignty. Thus, the contested policy of emissions trading becomes embedded in the more appealing narrative of national development and made politically attractive, despite unfavorable realities against it.

Carbon cap-and-trade regulation is widely adopted to reduce carbon emissions. Under this regulation, we propose a carbon trading mechanism considering refrigerated logistics services in a fresh food supply chain. In addition to supplying fresh food, the supplier offers refrigerated logistics services and overstocked carbon emission permits to the retailer. We study the decisions on the price of emission permits traded within the supply chain, the retail price and the price of refrigerated logistics services in different carbon trading options, without carbon trade, inner carbon trade, inner and outer carbon trade. Pricing strategies for fresh food, emission permits and refrigerated logistics services are provided for supply chain members. We also reveal the relationship between carbon trading and refrigerated logistics services, and investigate their joint influence on the supplier–retailer cooperative relationship. In addition, it is shown that with the implementation of a transfer payment mechanism, supply chain members are motivated to participate in the carbon trading mechanism, which has advantages including improved resource utilisation and more competitive supply chains.

Despite growing pressure on manufacturers and retailers across industries to disclose more information about their supply chains, companies still view transparency as a double-edged sword. Companies fear that the more information about suppliers and supplier conditions they disclose, the more they open themselves up to criticism from the outside, while, simultaneously, hiding such information causes criticism and suspicion. Through two online experiments we compare how supply chain transparency—namely, the disclosure of information about supplier names, supplier locations, and supplier working conditions—affects consumer perceptions. We do this under conditions of both positive and negative information, while also identifying the underlying mechanisms of this relationship. We find that the relationship between the disclosure of supply chain information and consumer perceptions of a firm is mediated by firm trustworthiness and perceptions of interpersonal justice in the supply chain. Furthermore, our results provide evidence that transparency, whether it reveals positive information or negative information, is more beneficial for firms than staying silent about supply chain practices. Our results suggest that it may be of interest for companies to prioritize the voluntary disclosure of supply chain information, especially in regard to social sustainability initiatives, whether or not they fear what is disclosed.

Under carbon cap and trade mechanism, collecting ratio and carbon cap seriously affect the decision of a manufacturer in a closed-loop supply chain. This paper constructs pricing models for manufacturing and remanufacturing products in the presence of carbon cap and trade mechanism, aiming to reveal the impact of the collecting ratio for the carbon emission. A manufacturer and a carbon-trade supplier are involved in a Stackelberg pricing game. First, a decision model without carbon trade is formulated. Judging conditions are shown for determining whether carbon cap and collection ratio are effective factors. The two-sided impact of the collection ratio over the carbon emission is demonstrated. In practice, the manufacturer sometimes produces and sells a large proportion of new products by pricing strategies when facing a low collection ratio. Second, a Stackelberg game is played between the manufacturer and the carbon-trade supplier. We demonstrate that the decision model without carbon trade and the game model with carbon trade compose a complete decision process for the manufacturer. Finally, numerical illustrations are designed to examine the sensitivity of the carbon emission with respect to the collection ratio and determine the decision area when both the collection ratio and the carbon cap change.

Biomass residues due to their low bulk density typically require frequent transportation from biomass plantations in rural areas to conversion bio-energy power plants. This issue contrasts with environmental protection strategies, especially when power plants are facing different carbon reduction policies that enforce them to emit less than a given specific carbon amount. Although several researchers have investigated bio-energy supply chains concerning environmental policies, the majority of studies have been devoted to strategic decisions over a single planning period. This paper presents a multi-period bio-energy supply chain under carbon pricing (carbon tax) and carbon trading (cap-and-trade) policies at the tactical planning level. A mixed-integer linear programming model was adopted to optimize the proposed regional oil-palm biomass-to-bio-energy supply chain planning model. The numerical results indicate that when carbon pricing is in place when carbon tax increases linearly, carbon emissions’ reductions have a nonlinear trend, whereas both cost increase and carbon emissions’ reductions have a relatively upward trend in the carbon trading scheme. This paper also presents the sensitivity analysis of the proposed model regarding cost, emissions’ generation and supply chain performance. Finally, the paper recommends several significant practical implications and policy-making insights for managers and policymakers.