Low-Carbon Supply Chain Coordination Based on Carbon Tax and Government Subsidy Policy

Abstract

To meet the demands of society’s transition to a low-carbon economy, this study analyzes and designs a coordination contract that is suitable for a low-carbon supply chain, under the circumstances of a carbon tax policy and government subsidies; this is to achieve a reduction in emissions and a growth in the total profits of the supply chain, while simultaneously improving the sustainable competitiveness and coordination of the supply chain. Manufacturers and retailers make up the two levels of the supply chain that are the focus of this study. Both centralized and decentralized decision-making models are created using the Stackelberg game method. By analyzing the supply chain decision-making and emission-reduction strategies in both cases, the revenue-sharing contract is designed to achieve the sustainable coordination of the y chain. The results of the numerical analysis show the following: first, that more orders are placed and emissions are reduced under centralized decision-making than under decentralized decision-making; second, that the total supply chain’s profits are higher when all parties comply with the revenue-sharing contract than when there are no contracts; third, that the revenue-sharing contract allows for the free allocation of supply chain gross margins in the enterprise for supply chain coordination.