Research On Low Carbon Operation Decision Of Capital-constrained Supply Chain Under Procurement Commitment Contract

The inevitable course to reach the " carbon peaking and carbon neutrality goals" is to expedite the creation of low-carbon supply chains.As corporate environmental responsibility has expanded,supply chain enterprises are generally embracing cooperative emission abatement for sustainable development.However,implementing low-carbon emission reduction strategies entails significant risks,high costs,and puts the small and medium-sized enterprises(SMEs)which lack of capital in danger.It is critical to provide corresponding cooperation strategies and incentives for large downstream core enterprises in order to motivate SMEs to achieve integrated operation and carbon emission reduction.Based on which,we build a supply chain that includes a capital-constrained supplier and a dominant retailer,and the retailer offers procurement commitment contract to supplier to help them carry out its production and investment in carbon reduction.This paper investigates the supply chain that produces a single product with low-carbon attributes.Under the "cap-and-trade" regulation,the capital-constrained supplier will use the procurement commitment contract provided by retailer to raise funds from the competitive banking market to carry out its production,carbon abatement investment,and even insufficient emissions permits purchase.In order to investigate the impacts of procurement commitment contract provided by the retailer on the economic and environmental performance of the capital-constrained supply chain,we develop a Stackelberg game between the retailer and supplier,where the former as the leader decides the procurement commitment amount,and the latter as the follower chooses the output and carbon abatement level.We derive the equilibrium of the game and conclude the economic and environmental values of procurement commitment contract in the operation of the capital-constrained supply chain under four scenarios: without and with emissions-dependent demand,credit limit,and carbon emission reduction target.The results show:(1)The retailer will provide the procurement commitment contract only when the supplier’s gross margin is less than a certain threshold,under which Pareto-improvement of the supply chain can be achieved.(2)Providing the procurement commitment contract will negatively affect the carbon abatement performance of the supply chain,in terms of the total carbon abatement or abatement per unit product.(3)Under the credit limit scenario,we find that if the bank sets a credit limit for the supplier based on the value of the retailer’s procurement commitment contract,the retailer will always provide the contract to enhance the supplier’s financing and production capacity,regardless of the supplier’s gross margin.(4)Under the scenario of carbon abatement target,we find that if the retailer imposes a specified carbon abatement target on the supplier as a precondition of providing the procurement commitment contract,i.e.providing a combination of "procurement commitment contract + carbon emission reduction target",which may achieve coordinated improvement of the economic and environmental benefits of the supply chain.