Greening, Pricing and Marketing Coordination for a Complex Three-Level Supply Chain Under the Carbon Tax in China

Abstract

This paper examines a complex supply chain consisting of a raw material manufacturer, a consumer goods fabricator, a retailer and an end user. A sequential decision game model is constructed under carbon tax regulation, considering multiparty green technology innovation and green product marketing efforts in the supply chain. Using a backward-induction analysis process, the Nash equilibria of the game are obtained. With the help of numerical simulation, the sensitivity analysis of the key parameters affecting system performance is carried out. We find the following results. (i) Carbon tax regulation brings about a new cost burden for supply chain members in different ways, with the largest impact being on the profit of the raw material manufacturer. (ii) The marginal emission reduction effect of carbon tax regulation shows a declining trend. The cost of greening efforts will exceed the carbon tax rate as it continues to rise. (iii) Customer demand is significantly affected by the footprint and energy efficiency of products and is much more relevant for energy efficiency than for footprint in the production phase.