Research On Carbon Audit Mechanism For Emission Reduction Compliance Under Different Supply Chain Structures

Carbon emissions are considered to be the most important factor contributing to global warming.To tackle this climate issue,many countries and regions make corresponding emission reduction commitments.To meet these commitments,supply chain members need to actively reduce emissions at the micro-level.However,in practice,the supplier non-compliance with emission reduction is a common problem due to opportunistic behavior or ineffective emission reduction,which lead to goodwill loss of the core firm(the manufacturer)in the supply chain and hinder the progress of emission reduction in the supply chain.To this end,this paper explore how the manufacturer should manage the supplier non-compliance with carbon emission reduction from the micro-operational level to promote the sound development of supply chain emission reduction.Firstly,to deal with the supplier non-compliance,a one-to-one low-carbon supply chain system consisting of a single supplier and a single manufacturer is studied,and based on carbon audit,a tool that can identify non-compliance,a tolerance-based carbon audit mechanism and a suppression-based carbon audit mechanism are designed based on the practices of HP and Huawei in managing the supplier non-compliance.The study investigates the influence of the manufacturer’s self-interest strategy and win-win strategy on the choice of these two carbon audit mechanisms.The results show that the optimal carbon audit mechanism under both strategies depends on goodwill loss factor of the manufacturer and purchase price.Under the self-interest strategy,when the loss factor is low,or when the loss factor is moderate and the purchase price is low,the tolerance-based carbon audit mechanism is preferred;when the loss factor is moderate and the purchase price is high,or when the loss factor is high,the suppression-based carbon audit mechanism is preferred.Under the win-win strategy,when the loss factor is low or moderate,the tolerance-based carbon audit mechanism prevails if the purchase price meets certain conditions.In addition,the carbon audit mechanism based on the self-interest strategy is more effective in dealing with the supplier non-compliance with carbon emission reduction than the win-win strategy.Second,to further investigate the question that whether manufacturers should cooperate in carbon audit when dealing with the supplier non-compliance with emission reduction,the study is extended to a one-to-many low-carbon supply chain system consisting of one supplier and two manufacturers,and the independent carbon audit mechanism(two manufacturers do not cooperate in carbon audit)and the shared carbon audit mechanism(two manufacturers do not cooperate in carbon audit)are designed.The results show that the shared carbon audit mechanism always improves the efficiency of carbon audits,i.e.,the shared carbon audit mechanism has a “amplification effect”.In particular,in the case of low incentive intensity and high the loss,the high efficiency of carbon audit comes at the expense of environmental performance,i.e.,the shared carbon audit mechanism is not effective in addressing the supplier carbon reduction non-compliance.Shared carbon audits are always more profitable for manufacturers,but usually crowd out the supplier’s profits.It is worth noting that,under certain conditions,the shared carbon audit mechanism can be a “win-win-win” for all three parties,but there is a “failure” to improve environmental performance,which reveals why noncompliance is so common in emissions reduction practices.The shared carbon audit mechanism can be effective in improving environmental performance at the expense of the supplier’s profit,thus leading to a lack of incentive to participate.Given this,we propose a shared carbon audit mechanism based on cost-sharing of emission reduction compliance to achieve a “win-winwin” for all three parties and thus enhance the enforceability of the shared carbon audit mechanism.Finally,the findings and management implications of this paper are presented to provide some theoretical references for manufacturers to deal with the problem of carbon emission reduction non-compliance by suppliers.In addition,the limitations of this paper’s research are analyzed,and then the future research directions prospect.