2937. Supplier Selection under Carbon Border Adjustment Mechanism
Invited abstract in session MB-42: Game theory for the circular economy, stream Circular & Sustainable Supply Chains.
Monday, 10:30-12:00Room: Newlyn GR.02
Authors (first author is the speaker)
| 1. | Enis Kayis
|
| Industrial Engineering Department, Ozyegin University | |
| 2. | Serkan Ürkmez
|
| Industrial Engineering, Ozyegin University |
Abstract
Emission Trading Systems (ETS) and the Carbon Border Adjustment Mechanism (CBAM) are pivotal carbon pricing mechanisms in the global effort to combat climate change. These strategies aim to reduce carbon emissions and promote green technology investments and sustainability practices across industries. Complementary to ETS, CBAM addresses the risk of carbon leakage by imposing a carbon price on specific imported goods, ensuring they meet similar carbon emission standards as domestically produced items. In this work, we explore the efficacy of CBAM in addressing carbon leakage and stimulating green technology investment for decarbonization. We focus on dual suppliers: one operating within a regulatory ETS region and the other in a non-ETS region subject to CBAM. Both suppliers provide materials to a manufacturer located in an ETS region, although the products themselves are not subject to ETS content regulations. We derive the equilibrium quantities regarding pricing and quantity decisions of the firms, and derive business insights on supplier selection and overall strategies for reducing carbon emissions.
Keywords
- Game Theory
- Supply Chain Management
- Sustainable Development
Status: accepted
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