Study on low-carbon supply chain optimization strategies under endogenous carbon price

Abstract

This paper studies low-carbon supply chain optimization strategies when carbon price is endogenous. The demand is modeled as a function of retail price and carbon purification level. By analyzing optimization strategies of two models building on Stackelberg game, we show that too strict or loose carbon quota policy is not conducive to the maximum benefit for government and enterprises, and it has significant influences on the total social welfare of government and the expected benefits of direct emission reduction enterprise, but has no remarkable effects on non-direct emission reduction enterprise. Moreover, we also find that the carbon purification level, wholesale price and retail price are negatively related to carbon cap and sensitivity coefficient.