1287. Carbon Emissions Reduction in Competitive Supply Chains under Carbon Cap-Sharing Mechanism
Invited abstract in session TC-42: Regulations in sustainable supply chains, stream Circular & Sustainable Supply Chains.
Tuesday, 12:30-14:00Room: Newlyn GR.02
Authors (first author is the speaker)
| 1. | Chang Lyu
|
| School of Management, Harbin Institute of Technology | |
| 2. | Songsong Liu
|
| School of Management, Harbin Institute of Technology |
Abstract
The conventional carbon quota allocation system often imposes disproportionate emission reduction burdens, leading to inefficient surplus allowance utilization. The carbon cap-sharing mechanism promotes efficient carbon asset utilization by facilitating internal quota trading at lower prices and using external trading to address any remaining imbalances. This study develops a Stackelberg game model under the cap-and-trade policy, with the supplier as the leader and manufacturers as followers. One manufacturer faces a shortage of carbon quotas due to high emissions, while the other has a surplus due to low emissions. Three scenarios are analyzed: (i) external carbon trading only, (ii) horizontal carbon trading between manufacturers before external trading, and (iii) vertical carbon trading between the supplier and a manufacturer before external trading. Results show that horizontal carbon trading improves cost efficiency and reduces reliance on external markets, while vertical carbon trading enhances coordination between the supplier and manufacturers. Comparative analysis shows that centralized decision-making leads to better emission reduction outcomes, while sensitivity analysis indicates that market competition, consumer preference for low-carbon, and carbon pricing affect strategic decisions. These insights can guide policymakers and supply chain managers in optimizing environmental and economic performance through cap-sharing mechanism.
Keywords
- Supply Chain Management
- Sustainable Development
- Game Theory
Status: accepted
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