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Vol. 39, No. 4, 2025

Research on emission reduction decision of dual-product low-carbon supply chain under carbon trading and blockchain technology

Title

Research on emission reduction decision of dual-product low-carbon supply chain under carbon trading and blockchain technology

Author

ZHANG Lingrong; WANG Feng; LIU Xiaoyan

Abstract

With the rapid growth of the global economy, environmental degradation has emerged as a significant challenge for humankind, and the reduction of carbon emissions has become an urgent priority. The carbon quota trading mechanism is a crucial tool for China to achieve its goals of carbon peak and carbon neutrality by reducing carbon emissions. Not only has the government implemented pertinent policies to encourage the reduction of low-carbon emissions, but enterprises are also consistently seeking opportunities to achieve a mutually beneficial scenario of enhancing economic and environmental advantages. Furthermore, energy conservation and emission reduction are of great concern to all of us. Raising consumers′ awareness of low-carbon environmental protection and promoting a low-carbon lifestyle is crucial for achieving low-carbon economic development goals. Nonetheless, numerous enterprises prioritise their interests and engage in misleading advertising of low-carbon product information. As a result, most consumers distrust the reliability of such information and are reluctant to purchase low-carbon products. Blockchain technology enhances consumer trust through its strong traceability, trusted nature and transparent information which enables the tracking of carbon emissions for low-carbon products. This indicates that investing in blockchain technology has a significant positive impact on reducing emissions in the supply chain.This paper examines the secondary supply chain made up of a single manufacturer and a single retailer, which produces both ordinary and low-carbon products. It develops five decision-making models for reducing emissions under the carbon trading mechanism, both with and without blockchain application. The Stackelberg game theory is employed to solve for the optimal unit emission reduction, optimal investment in blockchain, product demand, product price, and enterprise profit of two models. The optimal solutions of different models are then compared and analyzed to examine the influence of blockchain technology, carbon quota trading, and consumer green trust on the emission reduction decisions of members in the low-carbon supply chain.The study revealed that businesses make improved decisions when manufacturers and retailers invest in blockchain technology together. Adoption of blockchain technology has the potential to enhance the optimal reduction of emissions in low-carbon products. When the price of carbon trading falls below a certain threshold, the optimal reduction in emissions is positively correlated with the price of carbon trading. As the unit emission reduction increases, the rise in the demand for low-carbon products surpasses the reduction in demand for ordinary products, thereby increasing the total demand for products. When consumers develop greater confidence in the environmental benefits of blockchain technology, they may encourage enterprises to invest in emission reduction technology and blockchain-based initiatives, resulting in a reduction of total carbon emissions. When the proportion of blockchain costs borne by the manufacturer exceeds a certain threshold, both the manufacturer and the retailer are expected to experience greater profits than those who have not adopted blockchain technology. However, if the manufacturer′s portion of the blockchain cost falls below this threshold, it will negatively impact the retailer′s anticipated profits.According to the research, the following management implications can be drawn: Consumers need to increase their awareness of low-carbon environmental protection while enterprises should ensure the quality of low-carbon products and promote their competitiveness. This will lead to the transformation of low-carbon production. When using blockchain technology, manufacturers and retailers ought to agree upon a reasonable cost-sharing proportion to determine the optimal level of investment in blockchain technology. Additionally, they need to enhance publicity of the technology to guide consumers to increase their confidence in green low-carbon products. The increase in carbon trading prices within a certain range can also encourage enterprises to invest in emission reduction technology. If the range is exceeded, enterprise enthusiasm towards emission reduction will decrease rather than increase. Therefore, the government ought to implement a fair carbon quota trading policy to effectively regulate carbon trading prices and encourage businesses to reduce emissions. Additionally, as the adoption of blockchain technology to promote emission reduction has not resulted in substantial profit growth for producers and retailers, the government can provide certain economic incentives to enhance enterprise enthusiasm in using blockchain technology, thereby achieving a mutually beneficial outcome in ameliorating the economic, environmental, and social benefits of businesses.

Keywords

Carbon cap-and-trade; Blockchain technology; Low-carbon supply chain; Carbon emission reduction

Issue

Vol. 39, No. 4, 2025

References