A Study on Supply Chain Emission Reduction Level Based on Carbon Tax and Consumers’ Low-Carbon Preferences under Stochastic Demand

Abstract EN

This article focuses on the level of supply chain emission reduction, taking into account consumers’ low-carbon preferences, stochastic market demand, and carbon tax policy.

By introducing the emission reduction penalty mechanism and adopting reverse derivation method, it derives the revenue model of the retailer and the manufacturer in decentralized and centralized supply chain when the supply chain reduces emissions or is not under stochastic market demand.

The research results are as follows.

(i) The optimal retailer’s revenue is strictly monotonous increasing with respect to the consumers’ low-carbon preferences in the decentralized supply chain.

However, in the centralized supply chain, the optimal revenue of the retailer and the manufacturer are strictly monotonously decreasing of the consumers’ low-carbon preferences respectively.

(ii) The retailer’s revenue is a concave function of the order quantity, and there exists a unique order quantity that can maximize retailer’s revenue.

The manufacturer’s revenue is a concave function of the wholesale price, and there exists a unique wholesale price that can maximize manufacturer’s revenue.

(iii) When consumers’ low-carbon preferences are given, there is an optimal emission reduction level that maximizes the overall revenue of the supply chain.

Furthermore, as the carbon tax increases, the optimal emission reduction level gradually rises.

(iv) As the level of emission reduction in the supply chain increases, the range of the revenue sharing coefficient becomes larger, and it is easier for supply chain members to reach a revenue sharing contract.

However, when consumers’ low-carbon preferences and carbon tax increase, the opposite is true.