Financing Strategy of Low-Carbon Supply Chain with Capital Constraint under Cap-and-Trade Regulation |
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Authors: | Changli Lu Ming Zhao Imran Khan Peerapong Uthansakul |
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Affiliation: | 1.School of Economics and Management, Shanghai Maritime University, Shanghai, 201306, China
2 School of Economics and Management, Pingdingshan University, Pingdingshan, 467000, China
3 Department of Electrical Engineering, University of Engineering and Technology Peshawar, Peshawar, Pakistan
4 School of Telecommunication Engineering, Suranaree University of Technology, Nakhon Ratchasima, Thailand |
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Abstract: | Cap-and-trade regulation provides incentives for manufacturers to
reduce carbon emissions, but manufacturers’ insufficient capital can disrupt the
implementation of low-carbon emission reduction technologies. To alleviate capital constraints, manufacturers can adopt external financing for low-carbon emission reduction investments. This paper studies the independent financing and
financing cooperation behavior in a supply chain in which the manufacturer
and retailer first implement low-carbon emission reduction technologies and then
organize production and sales in accordance with wholesale price contracts.
Through comparing the optimal profits and low-carbon emission reduction levels
under the independent financing and financing cooperation mode, we come to the
following conclusions: (1) Although financing interest increases the cost of the
supply chain, manufacturers prefer to invest in reducing carbon emissions rather
than buying carbon quotas. (2) When financing independently, a decentralized
decision-making mode (MD) is the best choice for manufacturers. (3) In cooperative financing, when the supply chain adopts a decentralized decision-making
mode (SD) in which the retailer determines the financing cost-sharing ratio
according to their optimal profit, the profits of the supply chain and its members
are significantly improved. (4) When manufacturers and retailers adopt a centralized decision-making model (SC) in cooperative financing, they jointly determine the financing cost-sharing ratio and the level of low-carbon emission
reduction. If the financing cost-sharing ratio meets a certain threshold range,
the profits of manufacturers and retailers achieve Pareto improvement, indicating
that this cooperative financing model is effective. |
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Keywords: | Cooperative financing cap-and-trade supply chain coordination |
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