Pricing And Product Carbon Footprint Decisions And Coordination Of Supply Chain With Carbon Emissions Policies

In recent years, with the rapid development of industrial economy, some industrial enterprises based on fossil energy create wealth for humans and also release vast amounts of greenhouse gases, and cause serious environmental problems, such as global climate warming has become increasingly obvious, extreme weather is becoming more frequent, greenhouse effect is more and more serious. In order to mitigate the negative effects of climate change on human survival and development, the governments have put forward a series of carbon emissions policies to solve the problem of greenhouse gas emissions, such as carbon tax policy, carbon cap-and-trade mechanism, carbon labelling scheme.Although the purpose of the government has implemented these carbon emissions policies is to stimulate enterprises to reduce carbon emissions, but also bring new challenges to the supply chain operation decision, which make the supply chain decision makers consider not only to reduce the product carbon footprint, but the price of products to meet consumer market demand, and also must consider how to design the contract to coordinate the supply chain system under these carbon emissions policies.At the same time, the government is also considering how to formulate and adjust the policy constraints to more effectively stimulate enterprises to reduce product carbon footprint, as well as how to make the better choice between different policies. Particularly the carbon cap-and-trade mechanism has just started a pilot in our country, the carbon tax policy is in the verification and research stage, the product carbon footprint program associated with carbon labelling scheme will be implemented. Obviously, the government choosing which kind of policies is of great strategic significance for reducing carbon emissions in our country.In view of the above problems, this paper constructs a supply chain system consisting the manufacturer and the retailer and consumers, considering some shortcomings of the existing literature and the practical problems in the supply chain management, applying relevant theories about operations research optimization theory and game theory, and studies the pricing and product carbon footprint decision of supply chain under carbon tax policy, carbon cap and trade mechanism, carbon labeling system respectively. By comparing the optimal decision results between centralized and decentralized decision-making models, it is found that there is the "double marginalization" problem under the decentralized decision-making with carbon emission policies, so we coordinate the supply chain by using the two-part tariff contract.Then, according to the different mechanism of action of each policy, this paper discusses the impacts of carbon tax rates、carbon trading prices and carbon caps、consumer environmental awareness on product carbon footprint、sale price、market demand、supply chain profit and coordination mechanism respectively. Finally, the optimal decision results of supply chain under different carbon emissions policies are compared. Through this study, the following conclusions can be obtained:(1) Under carbon tax policy(carbon cap-and-trade mechanism, carbon labelling scheme), product carbon footprint and sale price not only depend on carbon tax rates(carbon trading prices and carbon caps, consumer environmental awareness), but also relate to its initial carbon footprint and the choices of decision-making styles for the supply chain.(2) To coordinate the supply chain system, under the carbon tax policy(carbon cap-and-trade mechanism), the manufacturer need to adjust dynamically the wholesale price and fixed fee in the two-part tariff contract according to the initial carbon footprint and carbon tax rates(carbon trading prices or carbon caps); under the carbon labelling scheme, the manufacturer need to adjust dynamically the fixed fee in the two-part tariff contract according to the initial carbon footprint and the level of consumer environmental awareness(the wholesale price equals to the unit cost of production).(3) Under carbon tax policy, the government can adjust the tax rates according to the initial product carbon footprint to stimulate the manufacturer to reduce product carbon footprint; Under carbon cap-and-trade mechanism, the government can control complementally carbon caps to stimulate the manufacturer to reduce product carbon footprint according to the initial product carbon footprint and carbon trading prices; Under carbon labelling scheme, due to the threshold effect existing in consumer environmental awareness stimulating the manufacturer to reduce product carbon footprint, the government needs to give some proper guidance to consumer for understanding product carbon footprint.(4) Given that carbon tax policy, carbon cap-and-trade mechanism, carbon labelling scheme, when the carbon tax rates, carbon trading prices, consumer environmental awareness level satisfy certain conditions, the product carbon footprints under the three policies are the same, the manufacturer and retailer are more easily to accept carbon cap-and-trade mechanism, and consumers will support carbon labelling scheme.(5) No matter which carbon emissions policy is implemented, the government should also carry out some measures about encouraging consumption or boosting consumption so as to increase the size of the potential demand, or offer subsidies to the manufacturer’s clean technology costs, which will effectively motivate the manufacturer to reduce product carbon footprint, finally the goal of reducing carbon emissions will achieve.At last, it is hoped that these conclusions may provide reference for the supply chain decision makers to make optimal decisions and to solve the coordination problem of supply chain system, and provide some theoretical basis for the government to adjust and select carbon emissions policies.