Abstract
In the carbon neutrality era, firms are facing increasingly intense environmental pressure and market competition. This paper considers two competitive supply chains with consumers’ low-carbon preference under the cap-and-trade regulation, each of which consists of one manufacturer and one retailer. Considering competition or integration in vertical and horizontal directions, four different supply chain structures are modeled. By applying a game-theoretical approach, the equilibrium pricing, carbon emission reduction (CER) level, profit, and social welfare are obtained. Through comparison and analysis, the economic and environmental impacts of supply chain competition are explored. The results show that (1) the carbon quota acts as a kind of financial subsidy and brings direct economic profit to the supply chain, which cannot be used to incentivize the firm to invest in CER technology; (2) the HCVI strategy can bring the highest CER level, the most market demand, and social welfare among the four strategies; (3) for the enterprise and the government, it is recommended to take measures and enact policies to strengthen the vertical integration and horizontal competition between supply chains. Our study can guide firms on how to cope with increasingly fierce industry competition and environmental pressure by adjusting their operational decisions and supply chain structure.
Highlights
Sustainable development has gradually become the common consensus of the whole society to combat global climate change [1–3]
The less carbon emission reduction (CER) technology investment leads to lower market demand, supply chain profit, and total social welfare
We have investigated how the supply chain structure, affects the firm’s carbon emission reduction strategy and social welfare under cap-and-trade regulation
Summary
Sustainable development has gradually become the common consensus of the whole society to combat global climate change [1–3]. Res. Public Health 2022, 19, 3226 pressure and market competition, the enterprise has to invest in carbon emission reduction (CER) technologies to produce environmentally friendly products to appeal to more consumers so as to win more market space. The fierce market and supply chain competitions will have important impacts on the firms’ carbon abatement and pricing decisions under cap-and-trade regulation on the one hand. Based on the above analysis, we propose the following research questions: Research Question 1: Considering two competitive supply chains, what are the equilibrium carbon emission reduction and pricing decisions in four different supply chain structures under cap-and-trade regulation?. Research Question 2: What are the impacts of supply chain competition (including vertical and horizontal competition) on the manufacturer’s equilibrium CER decision, both firms’ profitability, and social welfare considering the consumers’ low-carbon preference?. To make the paper more readable, all proofs are presented in
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: International Journal of Environmental Research and Public Health
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.