Research on single/cooperative emission reduction strategy under different power structures.

Abstract

This paper develops low-carbon decisions in a two-echelon supply chain considering consumers' low-carbon preference and cap-and-trade (C&T) regulation. Two different power structures are considered, including manufacturer-dominated (MD) and retailer-dominated (RD) cases. The single emission reduction (SER) mode where only the manufacturer invests in low-carbon technology and the cooperative emission reduction (CER) mode where the manufacturer invests in low-carbon technology and the retailer invest in low-carbon promotion are investigated respectively. It is found that a relatively loose C&T regulation helps to promote the cooperation of supply chain enterprises. Under both MD and RD cases, CER mode is always a rational choice for supply chain enterprises. Under SER mode, the manufacturer's profit will not always decrease when he loses the dominant position. However, the RD case is profitable for the retailer and the supply chain. Under CER mode, the dominant role is important for both the manufacturer and the retailer. However, the profit of the supply chain under RD case may be lower than that under MD case. Through numerical analysis, we found that the fluctuation of carbon price has a more significant impact on the manufacturer's emission reduction decision under CER mode than that under SER mode. In addition, with the increase of unit carbon price, the RD case performs better than the MD case in promoting supply chain's low-carbon level and profit.