Journal
JOURNAL OF CLEANER PRODUCTION
Volume 134, Issue -, Pages 652-662Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.jclepro.2016.01.012
Keywords
Low-carbon; Cap-and-trade; Environmental consciousness; Price premium
Categories
Funding
- National Natural Science Foundation of China [71571171, 71271199, 71171001]
- Program for New Century Excellent Talents in University [NCET-13-0538]
- Fundamental Research Funds for the Central Universities of China [WK2040160008]
- Youth Innovation Promotion Association, CAS [2015364]
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Manufacturers face a choice of whether to reduce their carbon emissions through employing low-carbon technologies. Though many carbon regulations are set up to curb carbon emissions, some firms choose not to take low-carbon production because the additional cost of low-carbon progressing is high. However, low-carbon production would be a better alternative when we consider consumer's low carbon premium in the cap-and-trade system. In this work, we solve the manufacturer's multi-product joint pricing and production problem when consumers value the low-carbon product higher than the ordinary product. Our findings provide firms with conditions where low-carbon production is profitable. Furthermore, we find that the cap-and-trade would constrain the total carbon emissions and promote low-carbon production simultaneously under certain conditions. (C) 2016 Elsevier Ltd. All rights reserved.
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