Carbon pricing versus emissions trading: A supply chain planning perspective
By Atefe Zakeri, Farzad Dehghanian, Behnam Fahimnia, Joseph Sarkis. 2015
354 citations recorded by the source corpus.
Carbon pricing (taxes) and carbon emissions trading are two globally practiced carbon regulatory policy schemes. This paper presents an analytical supply chain planning model that can be used to examine the supply chain performance at the tactical/operational planning level under these two policy schemes. Model implementation and analyses are completed using actual data from a company operating in Australia, where these environmental regulatory policies are practiced. Numerical results provide important managerial and practical implications and policy insights. In particular, the results show that there are inflection points where both carbon pricing and trading schemes could influence costs or emissions reductions. An erratic nonlinear emissions reduction trend is observed in a carbon pricing scheme as the carbon price increases steadily; whereas emissions reduction in a carbon trading scheme follows a relatively linear trend with a nonlinear cost increase. Overall, a carbon trading mechanism, although imperfect, appears to result in better supply chain performance in terms of emissions generation, cost, and service level; even though a carbon tax may be more worthwhile from an uncertainty perspective as emissions trading costs depend on numerous uncertain market conditions.
Subfields: Economics and Econometrics, Environmental Engineering, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/f62087c2650f07db4949609c2745cf183f919a4e
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
In Environmental Engineering
In Strategy and Management
Citations in the corpus
- Resilient and sustainable supply chain design: sustainability analysis under disruption risks (2018, background): “• Optimisation models for investigating environmental policy instruments such as carbon tax and trading mechanisms (Diabat et al. 2013; Fahimnia et al. 2015; Zakeri et al. 2015).”