ELECTRICITY SUPPLY CHAIN COORDINATION WITH CARBON ABATEMENT TECHNOLOGY INVESTMENT UNDER THE BENCHMARKING MECHANISM

Abstract

The introduction of the benchmarking mechanism into the electricity industry has inuenced whether utility firms choose to invest in carbonabatement technology. This study presents an electricity supply chain thatincludes a utility firm as the leader and a retailer as the follower to decide onthe electricity price and carbon abatement technology investment. The studydiscusses the impact of the benchmarking mechanism on the decision-makingof the electricity supply chain enterprises. The main conclusions are as follows:(1) Investing in carbon abatement technology increased electricity demand,customer surplus, and profits of the electricity supply chain enterprises. (2)Carbon abatement technology investment and profits of the supply chain en-terprises increased with the unit carbon quota. (3) A revenue-sharing and cost-sharing contract could be used to coordinate the electricity supply chain