Study On Coordination Of Green Supply Chains And Equity Of Emission Permits Allocation Scheme With Cap-and-trade Regulation

In recent years,a large number of greenhouse gases such as carbon dioxide emissions make the global temperature rising and result in a series of climate disasters.Governments and international organizations thus take various measures actively to reduce carbon emissions.Under the Cap-and-Trade regulation pioneered by the Kyoto Protocol,carbon emissions trading,which reduces carbon emissions through economic stimulus,has become an important means to control greenhouse gas emissions all over the world.In this mechanism,the government allocated or sold the emission permits to the emitters in the form of quotas,and allow the emitters to trade freely in the open market.For the successful implementation of Cap-and-Trade,the fairness of carbon emission permits allocation scheme and the impact of trading mechanism on industrial activities are the basis.According to the existing literature and research progresses,the supply chain coordination with the policy intervention of local government and carbon emissions trading between enterprises needs a further reaserch.Based on the above background,the coordination of green supply chain and the equity of free carbon emission permits allocation scheme with the Cap-and-Trade regulation is discussed in this research,which includes:(1)The coordination and competition between green supply chains without the Cap-and-Trade regulation.The inter-chain competition and intra-chain coordination between green supply chains with two heterogeneous substitutable products and without government's emission regulation was analyzed.With the competition between enterprises and the master-slave relationship between supply chains,the problem is discussed as three basic competitive decision scenarios:"decentralized-decentralized","centralized-decentralized" and"centralized-centralized".In the models for the scenarios,the retail price and green emission reduction level of two alternative products were the decision variables,and the models were analyzed by Stackelberg game and Bertrand game.With the results of the modeling solution,it is found that the "centralized-centralized" decision-making significantly match the requirements of the clean production and the environmental protection.(2)The coordination and competition between green supply chains with Cap-and-Trade regulation.For the "centralized-centralized"decision-making scenario,the inter chain competition and coordination between green supply chains with emissions permits trading between the manufacturers was analyzed,in which the fixed free emissions permits allocated by local government and the fixed carbon emissions trading price was considerated.The retail price and green emission reduction level of two alternative products were the decision variables,the model was analyzed by Bertrand game.With the results of the modeling solution,it is found that the rising competition of the product's green emission reduction level will intensify the chain profit gap,and is proportional to the fixed carbon emissions trading price.It was also found that the equal allocation shceme of the free emissions permits is not beneficial to the enterprise with low level reducing technology,which leads to an equity issue of the free emission permits allocation scheme.(3)The coordination of green supply chains and the equity of the free emission permits allocation scheme with Cap-and-Trade regulation.For the "centralized-centralized" decision-making scenario,the inter chain competition and coordination between green supply chains with emissions permits trading between the manufacturers was analyzed.The local government allocated free emissions permits,the retail price and green emission reduction level of the products were the decision variable.Two bi-level programming were modeled,in which the Bertrand game with the profit maximization of each supply chain is the lower level programming,and the maximization of the total society welfare and the inequity minimum of free emission permits allocation scheme were taken as the two upper decision objectives respectively.With the results of the modeling solution,it was found that the total society welfare is stable with different free emission permits allocation schemes.It was also found that even the enterprise with low level reducing technology is placed at a competitive disadvantage position,the government can leverage the equity issue with differential free emission permits allocation schemes,and ensure the fair-play among enterprises.