Research On Carbon Emission Reductions And Financing Strategies Of Capital-constrained Supply Chain

In the past few years,the circular economy as a sustainable development strategy has attracted wide attention worldwide.In 2017,the report of the 19 th National Congress of the Communist Party of China announced that to promote green development and build ecological civilization,a circular economy system must be established.The circular economy aims to promote sustainable production and consumption by making more efficient use of natural resources.In order to achieve the goal of low-carbon development in a circular economy,many governments have implemented regulations(such as cap-and-trade regulation)that require firms to reduce their carbon emissions.In addition,considering the negative impact of carbon emissions,more and more consumers are focusing on low-carbon products.In response to policies and regulations and increasing consumer awareness of low carbon,more and more manufacturers are investing heavily to reduce their carbon emissions.However,due to limited funding,manufacturers may not be able to make optimal decisions regarding production and carbon reduction.In a single-cycle supply chain model consisting of a single manufacturer and a single retailer,this paper studies the supply chain’s optimal operating decisions in the case of bank financing and trade credit financing,ie,advance payment financing.Then,this paper studies the optimal operation decision of the supply chain when the retailer and the third-party agency provide partial credit guarantee or full credit guarantee to the capital-constrained manufacturer,respectively.We presents the following conclusions:Firstly,when the level of efficiency related to carbon emission reduction is high,the use of mixed financing(including trade credit financing)can encourage the manufacturer to increase carbon emission reductions;when the level of carbon emission reduction efficiency is low,mixed financing with a low-price discount can also stimulate the manufacturer to improve carbon emission reductions.When the manufacturer’s production cost is high,mixed financing with a low-price discount can improve both of the supply chain partners’ profits.Secondly,third-party credit guarantee can enable the manufacturer to obtain a greater level of credit guarantees.Under the retailer or third-party credit guarantee financing modes,regardless of the credit guarantee factor promised by the third-party,the manufacturer’s optimal profit is high in the case of retailer credit guarantee financing.However,the retailer’s optimal profit is equal under different financing modes.Finally,under the retailer or third-party credit guarantee financing modes,higher carbon emission reduction efficiency and consumers’ low carbon awareness will prompt the manufacturer to increase production and carbon emission reduction levels,thereby increasing the level of credit guarantees,and thus increasing the profits of the retailer and third-party agency.