Optimization Decision of Government-driving Closed-loop Supply Chain for Automobile Manufacturers from the Perspective of Carbon Trading

Abstract

Abstract:

The balance between economic growth and environmental degradation has attracted more and more attention of our government. Consumers concern cars’ environmental performance. Due to market failure, it is unlikely for carmakers to manage low-carbon supply chains voluntarily. Therefore, we try to work out a decision-making model where the automobile manufacturers implement low-carbon supply chain management under the supervision of an environmental-friendly government. For this purpose, the Stackelberg game model is established with the government as the first leader, manufacturers as the second leader and recyclers as followers. Through this two-stage game model, we explore a contract-based mechanism, under which the government incentivizes carmakers to lower carbon emissions and carmakers incentivize recyclers. The factors are verified by numerical calculation of the subsidy and the utility of the environment-friendly government. The results show that: the optimal incentive of the automobile manufacturer can effectively improve the recovery rate of used car-components; the size of the environmental damage factor directly affects the government’s incentive to different types of carbon emissions; the more interactive government policies are to each other, the greater impact consumer behavior will have on the government’s optimal subsidy rate and the smaller impact carmakers’ carbon cost reduction coefficient will have on the government’s optimal subsidy rate; the coordination of government’s many carbon policies and low carbon preferences of consumers, the degree of dynamic balance will directly affect the government’s optimal subsidy decision and the government’s maximum effectiveness.

Key words: carbon trading perspective, closed-loop supply chain, government carbon policy, consumer low-carbon preferences

Li Xinjun, Chen Meina, Da Qingli. Optimization Decision of Government-driving Closed-loop Supply Chain for Automobile Manufacturers from the Perspective of Carbon Trading[J]. , 2020, 32(5): 269-279.

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