Research On Supply Chain Financing With Budget Constrained Under Low-carbon Environment

It has been not only a global consensus but also a crucial goal of modernization construction to drive low-carbon economy. However, most of the SMEs(small medium enterprises), on one hand, are lacking in fund to research and operate emission-reduction projects; on the other, they are also having difficulty in gaining financial support separately from lenders due to intrinsic limit of strength and credit. With that in mind, co-financing is a natural choice to release SME from funding constraint during their contribution to the cause.In this dissertation, one of the conclusions is drawn through the review on carbon trading and its financing solutions home and abroad that it has sparked strong interest in the market with this huge funding gap yet to be filled. The opportunity clamors for this new way of fund raising. Inspired by current supply chain finance in China, an SME co financing scheme is designed and its operating characteristics and conditions are analyzed in terms of all parties' motivating factors. In order to have a better understanding of how decisions are made by each party, the two-tier supply chain comprised of single manufacturers and single retailers is studied via a basic model built in light of buyback agreement. Through this model, basic conditions are inferred for low-carbon supply chain to work under financial constraints. That means under this buyback agreement, profit functions of both retailers and manufacturers are affine transformations of those of supply chain system, which entails the optimal decision possible to be made by the two parties.The study proves fruitful. It shows the order quantity remains the same no matter the decision making of retailers and manufacturers is decentralized or the other way around, and the economic order quantity of supply chain with funding is higher than that without funding. It establishes economic order quantity of retailers, optimal emission reduction quantity, wholesale price and emission-reduction cost-distribution coefficient of manufacturers with funding, and deduces that optimal emission reduction quantity will decrease as bank rate, emission-reduction cost-distribution coefficient, wholesale price and retailer order quantity increase. Plus, it demonstrates that retailer's bankrupt risk declines as buyback price and emission-reduction cost-distribution coefficient rise, but goes up as bank rate increases, thus, for the purpose of practical reference, an interest range is put forth where retailers and manufacturers are willing to borrow a loan and the bank is willing to grant it.The dissertation provides backing for relevant theories of low-carbon supply chain and its financing schemes, innovates the methods of SME financing. It is the essence of this essay to remove the funding constraints in SME's participation in energy-saving and emission reduction projects, develop the low-carbon society in China and prove academically valuable and practically rewarding.