Leasing or Selling? Durable Goods Manufacturer Marketing Model Selection under a Mixed Carbon Trading-and-Tax Policy Scenario

Round  1

Reviewer 1 Report

This paper considers carbon emission in both production and consumption and models a manufacturer’s operational decisions under leasing and selling respectively. The novelty of this paper is to combine the cap-and-trade and the carbon emission tax as a mixed carbon emission regulation policy. Based on the equilibriums, the authors (1) explore how the mixed policy (represented by three parameters: the emission cap, the carbon trading price and the carbon tax rate) affects the manufacturer’s production and profit for selling and leasing marketing modes; (2) identify conditions under which one mode dominates the other; and (3) show that there exist some policies such that selling (leasing) mode leads to a win-win result in the sense of higher profit with lower emission. The model and the associated results with managerial insights are expected to contribute great to the research of operations management with environmental concerns. The paper is overall well written. I thus recommend acceptance with minor revision. Revision suggestions are as follows: (1) I understand that the literature on durable good usually adopts an infinite-time framework and focuses on the steady equilibrium. However, this modelling assumes that the manufacturer (as a monopolist) keeps its renting price and selling price constant for period t. Why does the manufacturer not change these prices (especially before the steady state arrives? I expected the author to better justify this modeling. (2) The authors should justify the assumption of e_0

Author Response

    We would like to thank the reviewer for the insightful comments and suggestions. We have revised the manuscript accordingly. Revised parts are highlighted in yellow in the paper. 

    Please see the attachment for details.

Author Response File: Author Response.pdf

Reviewer 2 Report

The paper is interesting and can be considered for publication. The following issues need to be solved well before its publication.

1. The title needs to be revised, and the ‘mixed carbon policy’ in the title is not clear.

2. Please define all abbreviations when they appear first.

3. Authors aim to address four questions. In my opinion, there should be one main question for one paper, and other questions are analysed in order to address the main question.

4. It will be better to demonstrate clearly the innovations of this work in the introduction.

5. Carbon cap-and-trade is a market-based carbon policy that is very suitable to restrain the carbon emissions of manufacturing companies. I do not understand why carbon cap-and-trade is suitable for manufacturing companies?

6. This paper uses both cap-and-trade and tax policies. It will be better to discuss more on the differences between the two mechanisms (OMEGA–The International Journal of Management Science. 2015. 57: 70-84).

Author Response

    We would like to thank the reviewer for the insightful comments and suggestions. We have revised the manuscript accordingly. Revised parts are highlighted in yellow in the paper. 

    Please see the attachment for details.

Author Response File: Author Response.pdf

Reviewer 3 Report

This paper addresses the carbon emissions from the production and consumption of durable goods. It builds the leasing and selling marketing models for the monopoly manufacturer, which considers the carbon trade-and-cap policy and the carbon tax policy. The authors analyze the influence of mixed carbon policy on the manufacturer’s production quantity, the leasing and selling profits and the consumer’s behavior. A win-win strategy is proposed in this study. 

Even though the problem itself is quite important, I failed to understand the content in the current version of this paper due to the poor English and the too general conclusion. Therefore, I recommend major revision of the paper. My decision is based on the following comments.

1、This paper analyses the manufacturing and marketing model selection decisions of a monopoly manufacturer under the mixed carbon policy. Why do you choose the monopoly manufacturer rather than others? Please provide more explanation in Section 1.

2、Line 235: " transaction costs in either market", It's better for the authors to clearly prove this assumption is correct. Because the transaction costs in second-hand market is too small to be neglected.

3、Line 668-670, I am worried about whether the setting of model parameter value is scientific, please provide additional explanation why you set these values.

4、Line 784 : "This goes against the common sense that the higher the carbon trading price is, the better".  This judgment is incorrect. Which part of this article supports the conclusion that" the higher carbon trading price is, the better"? Frankly, no trading price is the higher, the better.

5、In Section 7:Only some important and significant conclusions could be revealed in this section. Please provide some suggestions related to the consumption behavior. You need to revise your conclusion seriously.  

6、Please check the below content:

P1, Line 10:" Too much attention has been paid to reduce the impact of production on the environment" means we should not pay much attention to the impact? "Too much" contains a negative meaning.

P1, Line 11:" But many durable goods emit more carbon dioxide in the consumption process." The logic of the first two sentences is hard to understand.

P2, L45-46:“This means that more than 70 percent of the carbon emissions come from the electric vehicles’ consumption process.”There is ambiguity in this sentence.

P2, L88:“in the section 2”; 

P3, L121:“carbon tax is more simpler”;

P3, L124: “economic efficiency, political feasibility, the value of flexibility”;

P3, L125: “constructed a GEP model to comparing the effectiveness and efficiency of carbon cap-and-trade policy versus carbon tax policy.”;

P3, L135: “begins with the Coase paradox”;

P5, L195: “The carbon tax is an easier and lower cost policy than the carbon trade-and-cap policy is.”;

P5, L205: “Base on this”;

P9, L372-373: “Substituting equations (18) in (15)-(17), we have the optimal leasing price of the new durable goods, the market clearing price, and the optimal leasing profit as follows:”;

P6, Line 252, 253, 254:"According to previous research, a carbon cap-and-trade policy is more effective than a carbon tax policy is in reducing carbon emissions and stimulating the enthusiasm of manufacturers to reduce carbon emissions"

P17, L663:“Numerical Nnalysis”;

…….

It is important to note that your manuscript needs careful editing by someone with expertise in technical English editing paying particular attention to English grammar, spelling, and sentence structure so that the goals and results of the study are clear to the reader.

Overall, this study is interesting. For the scientific and rigor of research, you can improve this article from the above aspects.

Author Response

    We would like to thank the reviewer for the insightful comments and suggestions. We have revised the manuscript accordingly. Revised parts are highlighted in yellow in the paper. 

    Please see the attachment for details.

Author Response File: Author Response.pdf

Reviewer 4 Report

See attached document

Comments for author File: Comments.pdf

Author Response

    We would like to thank the reviewer for the insightful comments and suggestions. We have revised the manuscript accordingly. Revised parts are highlighted in yellow in the paper. 

    Please see the attachment for details.

Author Response File: Author Response.pdf

Round  2

Reviewer 3 Report

I agree to accept the current revised manuscript.