Abstract
This paper studies the potential of carbon-abatement cost-sharing contracts in optimizing the joint economic–environmental benefit of a green supply chain. One-way and two-way cost-sharing contracts were investigated, respectively, in scenarios in which a capital-constrained manufacturer has a dominant downstream retailer or a dominant upstream supplier. The manufacturer obtains financing from a competitively priced bank to fulfill its production, carbon-abatement investment, and even insufficient emission permit purchase given the fact that the cap-and-trade regulation exists. Results show that in both one-way and two-way cost-sharing cases, cost sharing of carbon abatement has no effect on the manufacturer’s output or its counterparty’s wholesale price decisions; however, it improves the carbon abatement level of the supply chain. As a result, such cost-sharing of carbon abatement is proven to hamper the profit of the overall supply chain, but it improves the joint “economic-environmental” benefit of the supply chain if the cost-sharing coefficient is properly chosen. Furthermore, this problem is studied in the case of consumers’ green preferences, and carbon-abatement cost sharing is also verified to have the potential to optimize joint economic–environmental benefits.
Funder
National Natural Science Foundation of China
Postdoctoral Science Foundation of China
MOE (Ministry of Education in China) Project of Humanities and Social Sciences for Young Scholars
Fundamental Research Funds for the Central Universities, CHD
Subject
Process Chemistry and Technology,Chemical Engineering (miscellaneous),Bioengineering
Cited by
3 articles.
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