A Study Of Manufacturers’ Low Carbon Financing Decisions Under Carbon Trading Regulation

Since the reform and opening up,China’s economy has continued to maintain medium to high speed growth,but economic development in various regions along with industrialization has accumulated different degrees of resource shortage and environmental pollution problems,such as water pollution,haze,land desertification,etc.Data show that in 2015,China’s pollution loss costs up to 2 trillion yuan,resulting in pollution management and structural transformation pressure,environmental problems are not improved.The reason for this is the lack of motivation for low-carbon production in manufacturing enterprises due to insufficient funds,single financing channels and high financing costs,which makes it difficult to improve their environmental performance and achieve sustainable supply chain operation.In order to promote the achievement of carbon peak and carbon neutral goals,and help enterprises actively carry out low-carbon transformation to achieve both ecological and economic growth.Corporate low-carbon financing has become one of the hot spots for scholars’ research.Therefore,the study considers the market with low-carbon preferences under carbon trading regulation,designs financing models in different contexts,and analyzes whether government subsidy policies can further enhance the ecological and economic benefits of low-carbon supply chains.It will be meaningful for the choice of both financing channels and production methods of enterprises.In this paper,we take manufacturers who lack capital endowment to make effective low-carbon inputs as the research object,and construct four financing decisions,namely,no financing,retailer sharing,carbon credit pledge and mixed financing under the conditions of sufficient and insufficient initial credits given by the government,as well as a subsidy strategy with government participation based on the optimal financing strategy.The research mainly borrows mathematical models to build profit function decision models under different situations,and solves the profit function by the inverse order solution method through Stackelberg game theory.The main research contents and findings include:(1)Under the scenario of no government subsidy,the profit function models of retailers and manufacturers are constructed and solved for the four financing methods of no financing decision,retailer sharing decision,carbon credit pledge decision and mixed financing decision,and then the latter three financing decisions are compared with the no financing decision in terms of emission reduction rate,retailer profit and manufacturer profit to investigate the impact of different financing decisions on supply chain performance.The impact of different financing decisions on supply chain performance is investigated.The validity of the model is verified by numerical analysis.The study found that: compared with the no financing strategy,the manufacturer’s supply chain performance can be effectively improved by adopting the retailer’s share or bank loan financing strategy;the manufacturer’s optimal financing strategy is influenced by both carbon credits and its own capital;the retailer’s participation in carbon emission reduction input sharing can not only improve its profitability,but also enhance its ability to cope with carbon trading market risks.(2)Based on the optimal financing model selection in Chapter 3,we construct the government subsidy strategy under the mixed financing decision and the retailer share financing decision,construct and solve the models of retailer profit,manufacturer profit,consumer utility and total social welfare functions respectively,and then compare the government subsidy decision with the no-government strategy for the analysis of emission reduction rate,retailer profit,manufacturer profit and total social welfare.to investigate the impact of government subsidies on supply chain performance.The validity of the model is verified by numerical analysis.It is found that the effect of government subsidies on supply chain performance can be compared with that of no government subsidies.As the amount of subsidies increases,the retailers will "piggyback" on the subsidies.