Citation: Li, C.; Wang, J.; Zheng, J.;
Gao, J. Effects of Carbon Policy on
Carbon Emission Reduction in
Supply Chain under Uncertain
Demand. Sustainability 2022, 14, 5548.
https://doi.org/10.3390/su14095548
Academic Editors: João Carlos de
Oliveira Matias and Paolo Renna
Received: 31 March 2022
Accepted: 29 April 2022
Published: 5 May 2022
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Article
Effects of Carbon Policy on Carbon Emission Reduction in
Supply Chain under Uncertain Demand
Changhong Li, Jialuo Wang *, Jiao Zheng and Jiani Gao
School of Economics and Management, Shanxi University, Taiyuan 030006, China; lch7320@sxu.edu.cn (C.L.);
zhengjiao@sxu.edu.cn (J.Z.); 15824938767@163.com (J.G.)
* Correspondence: wangjialuo1996@163.com
Abstract:
Although there are many articles on carbon emission reduction of sustainable supply chain,
most of them study the carbon emission reduction efficiency of supply chain in the case of single
carbon policy or demand determination. Based on previous studies, this paper considered a supply
chain consisting of a single manufacturer and a single retailer in an uncertain demand market. The
effects of demand randomness and different carbon policies on carbon emission reduction level and
optimal decision in supply chain were studied by constructing mean-variance utility function and
Stackelberg game. Due to the difficulty of data acquisition, this paper verified the equalization results
by numerical simulation. The results show that: (1) cap-and-trade policy, government subsidy policy
and carbon tax policy can promote the carbon emission reduction investment of supply chain, while
carbon tax policy will lead to the decline of the overall profit of supply chain; (2) For the manufacturer
and the retailer, adopting a strategy with a low degree of risk avoidance will increase its own profits;
(3) For the supply chain as a whole, it is more advantageous for manufacturers to adopt higher risk
avoidance strategies, while retailers to adopt lower risk avoidance strategies. In addition, in the
conclusion, this paper puts forward management implications related to stakeholders, thus providing
help for the development of sustainable supply chain.
Keywords:
mean-variance model; game theoretic analysis; cap-and-trade; government subsidies;
carbon tax
1. Introduction
As global warming increases, climate issues are becoming a major concern for all
countries. Under such circumstances, the task of carbon emissions abatement in the world
is even more urgent. As early as 1997, the Kyoto Protocol was formulated with the goal of
“stabilizing greenhouse gas levels in the atmosphere at an appropriate level”. Nowadays,
the European Union, Japan, South Korea and more than 110 other countries have committed
to becoming carbon neutral by 2050 [
1
]. However, although carbon reduction efforts are in
order around the world, the implementation of companies and supply chains still puts a
lot of pressure on them. From the economic side, companies are not willing to undertake
carbon reduction efforts, because it means they have to add a larger amount of spending
to invest in carbon reduction. As a result, some policies have been issued to encourage
companies to actively invest in carbon reduction.
The first is the active use of government subsidies. Government subsidy means
that the government subsidizes enterprises that reduce emissions or consumers who buy
low-carbon products to encourage enterprises to actively carry out the activities about
carbon emission reduction. In the “Climate Protection Plan 2030” issued by the German
government, 40% of the replacement cost subsidy is provided for residents to switch to
more environmentally friendly equipment or renewable energy heating [
2
]. The Chinese
government’s subsidy budget for new energy vehicles in 2021 is 37.58529 billion yuan, up
234% year-on-year [
3
]. Subsidizing the cost of carbon emission reduction can offset some
Sustainability 2022, 14, 5548. https://doi.org/10.3390/su14095548 https://www.mdpi.com/journal/sustainability
