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Sustainability 2015, 7(8), 10684-10708; doi:10.3390/su70810684

Investment Strategy of Emission-Reduction Technology in a Supply Chain

School of Business, East China University of Science and Technology, Shanghai 200237, China
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Author to whom correspondence should be addressed.
Academic Editor: Marc A. Rosen
Received: 2 June 2015 / Revised: 27 July 2015 / Accepted: 31 July 2015 / Published: 7 August 2015
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Abstract

Greenhouse gas emissions have serious impacts on the natural environment. Therefore, the restrictions imposed on carbon emission force enterprises to take carbon emission into consideration when making production decisions. In this paper, in the context of allowing emission trading and investment of emission reduction technology, models were presented for a two-stage supply chain to analyze the optimal investment and pricing decisions. The results indicate that manufacturer’s endurance capacity of reduction difficulty is higher in the cooperation model than in the Stackelberg game model, and that perfect coordination of supply chains can be realized by a revenue sharing contract. From the perspective of a consumer, low-carbon products mean higher price, so that subsidies or tax exemptions should be provided to keep low prices. Meanwhile, the government can promote investment in emission-reduction technologies and achieve its emission reduction targets by controlling emission trading price, strengthening emission reduction publicity and providing technology investment subsidies. View Full-Text
Keywords: investment of emission reduction; carbon emission trading; game theory; supply chain collaboration investment of emission reduction; carbon emission trading; game theory; supply chain collaboration
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Lou, G.X.; Xia, H.Y.; Zhang, J.Q.; Fan, T.J. Investment Strategy of Emission-Reduction Technology in a Supply Chain. Sustainability 2015, 7, 10684-10708.

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