Search Results (67)

Cross-border remanufacturing trade is developing steadily. Carbon tariffs and carbon cap-and-trade regulation have emerged as two important instruments for carbon governance, yet their independent and combined effects on supply chain operations remain insufficiently discussed, which delivers supplementary analytical space for cross-border remanufacturing supply chain research. This paper examines a cross-border supply chain consisting of an exporting manufacturer and an importing retailer that distributes both new and remanufactured products. Four research scenarios are established: no regulation, carbon tariffs only, cap-and-trade only, and dual mixed regulation. Adopting a two-stage Stackelberg game, we analyze equilibrium pricing, production, and carbon abatement decisions, and further evaluate environmental performance and overall social welfare. Firms with different initial carbon emission levels respond differently to regulatory stringency. The results show that carbon tariffs reduce total emissions but erode corporate profits and social welfare, while cap-and-trade regulation can mitigate such adverse effects. When carbon tariffs are stringent and carbon quotas are sufficient, dual regulation improves all participants’ profitability alongside better environmental quality and higher consumer surplus only within this paper’s simplified analytical context. This study offers tentative operational references for remanufacturing firms and theoretical and analytical implications for governments to design compatible cross-border carbon regulatory systems. Full article

Steel production accounts for approximately 7% of global GHG emissions. Brazil is the largest steel producer in Latin America, and carbon pricing is rapidly moving from a policy debate to an operational reality, making the financial exposure of Brazilian steelmakers to carbon regulation one of the most pressing industrial sustainability questions in an emerging market context. This study evaluates the financial exposure of the Brazilian steel industry to three carbon pricing scenarios: (i) a domestic cap-and-trade mechanism under Brazil’s Greenhouse Gas Emissions Trading System (SBCE); (ii) Carbon Border Adjustment Mechanisms (CBAMs) applied by key trading partners (EU, a hypothetical USA scenario, and a global scenario); and (iii) supply chain (Scope 3) exposure, relevant under net-zero corporate commitments and the expected expansion of EU-CBAM coverage. Using a scenario-based financial impact approach, with both macro-level (industry) and micro-level (company) analyses, results show that domestic carbon pricing could increase production costs by 7–21%, generating USD 1.6–4.9 billion in additional annual costs (equivalent to 4.3–13.3% of annual industry revenue). International CBAM exposure could reduce Brazilian steel export revenues by USD 570 million to USD 1.7 billion in a global scenario (1.5–4.6% of annual industry revenue). Supply chain emissions represent 68% of the industry’s total carbon pricing exposure, equivalent to USD 1.1–3.3 billion in domestic pricing costs and USD 388 million–1.16 billion in CBAM export revenue reduction. A company-level case study confirms the pattern, with lower Scope 3 intensity yielding a comparatively smaller but still material exposure. These findings offer practical decision support for steel companies and policymakers navigating the transition to a low-carbon economy. Full article

The inclusion of the cement industry into China’s national carbon emissions trading system in 2025 has fundamentally altered the compliance environment for high-emission enterprises, transforming carbon allowances from passive regulatory instruments into dynamic assets whose management directly affects financial performance. We develop a multi-scenario carbon asset management decision model tailored to the intensity-based benchmarking mechanism adopted by the national market. The model centres on the quota surplus-deficit variable EA4, which is computed from enterprise-level emission intensity relative to the industry benchmark, and decomposes the management problem into sequential selling and buying subproblems linked by coupled decision boundaries. A systematic parameter framework is constructed, and the model is applied to two cement enterprises—Enterprise A, a leading producer with a clear allowance surplus, and Enterprise B, a mid-tier producer operating near the benchmark boundary—through historical backtesting over the 2024–2025 period. Three principal findings emerge. First, the intensity benchmarking mechanism creates a dual-leverage effect whereby a 1.4% improvement in emission intensity (from 0.8112 to 0.8000 t/t) increases the quota surplus by 27%, a nonlinearity not captured by conventional compliance-cost models. Second, the model-driven strategy outperforms traditional experience-based approaches by 36.8% (baseline scenario, +95.20 vs. +69.58 MRMB) and 37.3% (risk scenario, −44.55 vs. −71.08 MRMB), with the improvement rate remaining consistent across both enterprises, suggesting that trading timing outweighs instrument selection in determining compliance cost outcomes. Third, dynamic CEA–CCER allocation captures an incremental 2.33 MRMB through the exploitation of a transient price inversion, a gain invisible to single-instrument strategies. Sensitivity analysis confirms that the relative advantage is robust to carbon price variations (±30%) and CCER offset caps (2–10%), while emission intensity and carry-over allowances represent the most consequential parameters for strategy direction, with EA4 crossing zero near the industry benchmark (I ≈ 0.85). The framework provides actionable decision support for cement and other high-emission enterprises navigating the unified carbon market, and contributes a quantitative methodology to the emerging field of environmental management accounting. This study contributes to Sustainable Development Goal 13 (Climate Action), Goal 7 (Affordable and Clean Energy), and Goal 9 (Industry, Innovation, and Infrastructure) by providing operational tools for decarbonisation in carbon-intensive industries. Full article

This article integrates sustainability principles into a three-echelon supply chain for deteriorating items with imperfect quality, consisting of a single vendor, a third-party logistics enterprise (3PL), and a single buyer, with a focus on balancing economic efficiency with environmental responsibility. The vendor is assumed to operate an imperfect production system, resulting in products of imperfect quality. The 3PL undertakes all transportation activities, while the buyer conducts a quality inspection process to detect defective items, which is subject to Type-I and Type-II errors. Aside from that, the inventory model also assesses carbon emissions arising from various operational activities including energy usage during production, warehousing, and disposal processes, and fuel consumption in transportation, for which the above members of the supply chain are accountable. Afterward, carbon management policies such as a carbon tax and carbon cap-and-trade are considered to regulate total supply chain emissions. The objective is to minimize the joint expected total cost by simultaneously optimizing shipment frequencies and the replenishment cycle for the buyer within carbon emission constraints. An iterative solution procedure is developed to address the problem. A numerical example and sensitivity analysis are provided to demonstrate the model’s applicability and to explore the influence of critical parameters. Finally, the study presents managerial insights, along with conclusions and recommendations for future research directions. Full article

Under the background of the carbon cap and trading mechanism, the shipping logistics service supply chain faces pressure to reduce carbon emissions, and artificial intelligence technology provides a new technological path for emission reduction. In the context of a carbon cap-and-trade system, this study examines a shipping logistics service supply chain comprising a service provider and a service integrator, where the provider adopts AI technologies for direct emission reduction and the integrator contributes indirectly. It investigates optimal decision-making under two models: a single emission-reduction model (only provider uses AI) and a joint-emission-reduction model (both adopt AI), while also exploring one-way and two-way cost-sharing contracts between them. The study establishes these models to analyze the impact of cost-sharing contracts on emission reduction levels, total service volume, and profits, and further examines how government regulation of carbon trading prices can promote reduction. Findings reveal that cost-sharing contracts effectively enhance emission reduction, output, and member benefits; one-way contracts are conducive to operations, while two-way contracts are effective only within a small cost-sharing ratio range. The joint model outperforms the single model under specific parameter thresholds, and cost-sharing ratios influence decentralized versus centralized decision-making. Government carbon price regulation can encourage reduction but must consider its effects on low-carbon logistics volume and profits. Full article

To enhance the low-carbon operational performance of integrated energy systems (IESs) under multi-source uncertainties, this study proposes a bilevel stochastic optimization framework incorporating a dynamic mean–CVaR risk model and a tiered carbon pricing mechanism. The upper level adopts an improved NSGA-II to jointly optimize economic cost, carbon emissions, and system flexibility through capacity planning decisions. The lower level performs scenario-based operation evaluation with a time-varying risk aversion coefficient, enabling differentiated risk responses across operating periods. A stepwise carbon price function and a capped carbon revenue mechanism are introduced to represent real carbon market regulations and avoid excessive emission reduction benefits. Multidimensional uncertainty scenarios—covering renewable variability, load fluctuations, and market price disturbances—are generated for risk-aware evaluation. Simulation results show that the proposed approach effectively reduces cost and emission volatility and achieves a more balanced trade-off between economy and low-carbon performance compared with conventional static-risk models. Sensitivity analyses further reveal that increased risk aversion shifts system operation strategies from economy-oriented to robustness-oriented modes, highlighting the importance of dynamic risk modeling and carbon policy design for future low-carbon multi-energy systems. Full article

The true contribution of economics to climate policy is marred by many misconceptions. This paper aims to help non-experts better understand economic insights by progressively introducing key concepts. We start with perfectly functioning markets, where prices act as powerful guides to channel scarce resources toward their best use from a social point of view. We then recognize that, in many real cases, markets fail to deliver their promise because prices are either absent or do not reflect social values. Anthropogenic greenhouse gas emissions constitute a particularly acute type of market failure affecting both the whole world and future generations. The fundamental source of this failure is the absence of a price on emissions, and economic research has followed two major routes. On the one hand, economists run complex simulation models to estimate the missing price, which can be used as a social yardstick to guide policy choices. On the other hand, they evaluate policy instruments able to reorient market forces toward more climate protection. Two instruments with a strong potential to influence behavior deserve particular attention: the carbon tax and cap-and-trade (or emissions trading) systems. Despite practical complications and the lack of international coordination, both policies have recently made encouraging progress. Full article

Growing climate concerns and rising consumer awareness of sustainability have reshaped strategic interactions in platform-based supply chains. This study examines how a manufacturer and an e-commerce platform make channel and fulfillment decisions under cap-and-trade regulation. The manufacturer chooses between non-encroachment and agency encroachment, while the platform decides between conventional and sustainable fulfillment. To capture the dynamic adaptation of boundedly rational agents, we develop an evolutionary game model (EGT) and characterize the evolutionary stable strategies. The findings indicate the following: (1) Platform investment in sustainable fulfillment exerts a strategic stabilizer effect, effectively protecting the reselling channel by reducing the manufacturer’s incentive to encroach even under moderate commission rates; (2) there exists a regulatory substitution effect between carbon pricing and commissions, where high carbon prices force manufacturers to encroach for survival, while low commissions encourage encroachment for profit; (3) consumer sensitivity exhibits a critical threshold behavior, where a synchronized transition to joint sustainability is impossible unless awareness exceeds a specific tipping point. Managerial insights suggest that platforms should view green logistics as a retention strategy to prevent channel fragmentation, while policymakers must coordinate carbon taxation with consumer awareness campaigns to avoid locking the system into non-green equilibria. Full article

Effective implementation of silvopastoralism, a key Nature-Based Solution for Europe’s climate goals, is hindered by a lack of decision-support tools clarifying trade-offs between efficiency and extent of carbon sequestration. To address this, we developed a multi-objective scenario analysis (4064 scenarios) to identify optimal strategies for silvopastoral expansion across the EU27 Mediterranean bioregion. We found an inverse relationship defining a clear trade-off: scenarios achieving the highest mean sequestration (up to 2.5 Mg CO₂ ha⁻¹ year⁻¹) are spatially limited, whereas those maximising total gains (approaching 10⁷ Mg CO₂ year⁻¹ in total) do so by incorporating vast areas, lowering mean rates. This trade-off is formalised by a Pareto front, from which we defined a best-balanced optimal scenario and three policy regimes (conservative, balanced, expansive). Progressing across the front involved shifting from converting primarily shrubby and sparsely vegetated lands to incorporating grasslands and mixed agro-systems. At the NUTS2 level, Spain and Greece emerged as hotspots. Notably, converting arable land was not a primary contributor to carbon gains, as the marginal carbon benefit on these productive soils is lower than on marginal lands due to their higher baseline soil carbon levels, indicating that large-scale implementation can focus on marginal lands to avoid conflicts with food security. While subject to uncertainties of the underlying land-use and carbon models, this analysis demonstrates that our framework enables policymakers to select spatially explicit strategies aligned with specific budget or sequestration goals. These insights can inform CAP eco-schemes and national LULUCF strategies. The resulting maps and code are freely available. Full article

As low-carbon supply chains increasingly integrate green transition strategies with digital transformation, coordinating high-cost green technology investments with data-driven marketing (DDM) becomes a complex managerial task. While these dual investments are essential for market growth, the inherent tension between economic efficiency and fairness concerns often triggers strategic friction phenomenon whose impact under cap-and-trade regulations remains insufficiently explored. This paper investigates the strategic implications of fairness concerns in a low-carbon supply chain in which a manufacturer invests in carbon emission reduction and a retailer engages in data-driven marketing (DDM), under a cap-and-trade regulation. We formulate four Stackelberg game models—Neutral Benchmark (NF), Retailer Fairness (RF), Manufacturer Fairness (MF), and Bilateral Fairness (BF)—to analyze the interplay between behavioral equity and economic efficiency. The main analytical results indicate that (1) fairness concerns universally function as an “efficiency tax” on the supply chain system, where the rational benchmark consistently yields the highest system efficiency. In contrast, bilateral fairness concerns lead to the worst performance due to double friction effects. (2) Counter-intuitively, the retailer can “weaponize” fairness concerns to extract surplus from the leader. Specifically, in environments with high carbon emission reduction costs, a fairness-concerned retailer compels the manufacturer to grant significant wholesale price concessions, thereby achieving higher profits than in a purely rational setting. (3) The manufacturer’s fairness creates a “Benevolence Trap” for the follower; to balance equity, a fair manufacturer tends to underinvest in green technologies, which severely contracts market demand and, unlike the retailer fairness scenario, fails to yield economic benefits for the retailer. (4) A critical “regime-switching” dynamic exists regarding the carbon trading price. While the retailer benefits from fairness strategies in nascent carbon markets, a pivot to rationality becomes optimal as carbon prices surge and efficiency dividends dominate. These findings offer novel managerial insights for supply chain members to navigate behavioral complexities and for policymakers to align incentive mechanisms. Full article

The paper introduces a real-time digital-twin controller that manages evacuation routes while operating GEEM for emergency energy management during building fires. The system consists of three interconnected parts which include (i) a physics-based hazard surrogate for short-term smoke and temperature field prediction from sensor data (ii), a router system that manages path updates for individual users and controls exposure and network congestion (iii), and an energy management system that regulates the exchange between PV power and battery storage and diesel fuel and grid electricity to preserve vital life-safety operations while reducing both power usage and environmental carbon output. The system operates through independent modules that function autonomously to preserve operational stability when sensors face delays or communication failures, and it meets Industry 5.0 requirements through its implementation of auditable policy controls for hazard penalties, fairness weight, and battery reserve floor settings. We evaluate the controller in co-simulation across multiple building layouts and feeder constraints. The proposed method achieves superior performance to existing AI/RL baselines because it reduces near-worst-case egress time ($T_{95}$ and worst-case exposure) and decreases both event energy $E_{\mathrm{e}\mathrm{v}\mathrm{e}\mathrm{n}\mathrm{t}}$ and CO₂-equivalent ${{CO}_2}_{\mathrm{e}\mathrm{v}\mathrm{e}\mathrm{n}\mathrm{t}}$ while upholding all capacity, exposure cap, and grid import limit constraints. A high-VRE, tight-feeder stress test shows how reserve management, flexible-load shedding, and PV curtailment can achieve trade-offs between unserved critical load $U_{\mathrm{e}\mathrm{n}\mathrm{e}\mathrm{r}\mathrm{g}\mathrm{y}}$ and emissions. The team delivers implementation details together with reporting templates to assist researchers in reaching reproducibility goals. The research shows that emergency energy systems, which integrate evacuation systems, achieve better safety results and environmental advantages that enable smart-city integration through digital thread operations throughout design, commissioning, and operational stages. Full article

As the world’s largest developing and carbon-emitting country, China is accelerating its greenhouse gas (GHG) emission reduction process, and it is of vital importance in achieving the goals set out in the Paris Agreement. This paper examines the historical development and current operation of China’s carbon emissions trading market (CETM). The current progress of research on the implementation of carbon emissions trading policy (CETP) is described in four dimensions: environment, economy, innovation, and society. The results show that CETP generates clear environmental and social benefits but exhibits mixed economic and innovation effects. Furthermore, this paper analyses the challenges of China’s carbon market, including the green paradox, the low carbon price, the imperfections in cap setting and allocation of allowances, the small scope of coverage, and the weakness of the legal supervision system. Ultimately, this paper proposes recommendations for fostering China’s CETM with the anticipation of offering a comprehensive outlook for future research. Full article

Between 2013 and 2020, China had implemented a pilot cap-and-trade carbon emissions trading system (ETS) in some cities. Previous research has reported that this policy significantly reduces air pollution in the policy-implementing districts. However, whether and to what extent there are spatial spillover effects of this policy on air pollution in other regions has not been sufficiently analyzed. The research objective of this study is to quantitatively assess the spatial spillover effects of China’s carbon ETS on air pollution. Based on data from 288 Chinese cities between 2005 and 2020, this study employs a multiple linear regression approach to estimate the policy effects. Our study finds that the policy significantly reduces the concentrations of black carbon (BC), nitrogen dioxide (NO₂), organic carbon (OC), particulate matter less than 1 micron in size (PM₁), fine particulate matter (PM_2.5), and particulate matter less than 10 microns in size (PM₁₀) in non-ETS regions. This indicates that the carbon ETS has beneficial impacts on air quality beyond the areas where the policy was implemented. The heterogeneity tests reveal that the beneficial spatial spillover effects of the ETS can be observed across cities with different levels of industrialization, population density, economic development, resource endowments, and geographical locations. Further mechanism analyses show that although the policy does not affect the degree of environmental regulation in other regions, it promotes green innovation, low-carbon energy transition, and industrial structure upgrading there, which explains the observed spatial spillover effects. Full article

This study examines the price dynamics of the UK Emission Trading Scheme (UK ETS) by integrating advanced computational methods, including deep learning and statistical modelling, to analyze and simulate carbon market behaviour. By analyzing long-memory effects and price volatility, it assesses whether UK carbon prices align with theoretical expectations from carbon pricing mechanisms and market efficiency theories. Findings indicate that UK carbon prices exhibit persistent long-memory effects, contradicting the Efficient Market Hypothesis, which assumes price movements are random and fully reflect available information. Furthermore, regulatory interventions exert significant downward pressure on prices, suggesting that policy uncertainty disrupts price equilibrium in cap-and-trade markets. Deep learning models, such as Time-series Generative Adversarial Networks (TGANs) and adjusted fractional Brownian motion, outperform traditional approaches in capturing price dependencies but are prone to overfitting, highlighting trade-offs in AI-based forecasting for carbon markets. These results underscore the need for predictable regulatory frameworks, hybrid pricing mechanisms, and data-driven approaches to enhance market efficiency. By integrating empirical findings with economic theory, this study contributes to the carbon finance literature and provides insights for policymakers on improving the stability and effectiveness of emissions trading systems. Full article

This study investigates two pricing strategies within a vendor-buyer supply chain system under cap-and-trade regulation, emphasizing demand sensitivity to market price and green technology investment. The findings reveal that quantity discounts significantly enhance profitability across the supply chain by encouraging buyers to place larger orders, thereby benefiting vendors, buyers, and end consumers. A novel profit-sharing parameter is introduced to foster sustainable and mutually beneficial relationships between supply chain participants. A search algorithm is developed to determine the optimal solutions by using the profit-sharing mechanisms. The analysis yields three key insights: first, a critical cap threshold is identified, enabling supply chain participants to make informed strategic decisions based on the value of the cap; second, another critical cap threshold is derived to assist governments in setting feasible emission limits that incentivize vendors to invest in green technology—caps below this threshold may discourage such investments; third, a reasonable return on investment (ROI) benchmark is established to guide vendors in adopting effective green technology strategies. Numerical examples and sensitivity analyses are conducted to illustrate the theoretical framework and validate the findings. Full article