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Article

Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective

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School of Management Science and Engineering, Nanjing University of Finance and Economics, Nanjing 210023, China
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School of Marketing and Logistics Management, Nanjing University of Finance and Economics, Nanjing 210023, China
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School of Business, Nanjing University, Nanjing 210093, China
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School of Management and Engineering, Nanjing University, Nanjing 210093, China
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Author to whom correspondence should be addressed.
Sustainability 2020, 12(4), 1548; https://doi.org/10.3390/su12041548
Received: 24 January 2020 / Revised: 7 February 2020 / Accepted: 7 February 2020 / Published: 19 February 2020
(This article belongs to the Special Issue Optimal Decisions and Risk Assessment in Sustainable Supply Chains)
With a rigid requirement for environment protection, governments need to make appropriate policies to induce firms to adopt green technology in consideration of the rapidly increasing demand for environmentally friendly products. We investigated the government policy from the perspective of a supply chain, which consisted of the upstream government (she) and the downstream manufacturing firm (he). The government decided on the policy (tax or subsidy) to maximize the social welfare, while the firm decided on the greenness level of the product, which affects the consumers’ choice behavior and hence his own demand. Assuming else being equal, the government should adopt the tax policy if consumers are very sensitive to the greenness, the cost of greening is high, or the negative impact due to carbon emission is large, and subsidize the firm otherwise. We also conduct some numerical studies when price is endogenous. The main insights can be carried over. View Full-Text
Keywords: supply chain; government policy; green product; social welfare supply chain; government policy; green product; social welfare
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MDPI and ACS Style

Yin, X.; Chen, X.; Xu, X.; Zhang, L. Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective. Sustainability 2020, 12, 1548. https://doi.org/10.3390/su12041548

AMA Style

Yin X, Chen X, Xu X, Zhang L. Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective. Sustainability. 2020; 12(4):1548. https://doi.org/10.3390/su12041548

Chicago/Turabian Style

Yin, Xing, Xiaolin Chen, Xiaolin Xu, and Lianmin Zhang. 2020. "Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective" Sustainability 12, no. 4: 1548. https://doi.org/10.3390/su12041548

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