[en] Highlights: • Government should undertake the obligations of supervision to reduce collusion. • Under current re-verification policy GCs tends to collusion in some situations. • The initial re-verification probability is the major factor to collusion behavior. • The GCs with a decreasing IVA are more likely to conceal emission. • The proposed re-verification policy outperforms the current one in some conditions. -- Abstract: Carbon emission verification is one of the key factors required for proper implementation of a cap-and-trade (C&T) system. However, to obtain more revenue, emission generating companies (GCs) may collude with third-party verifiers (3 PVs) and conceal real carbon emission data. Based on actual practice of Shenzhen's C&T system, a three-player game model has been devised in this paper to analyze the behaviors among GCs, 3 PVs and government. Given the government's current piecewise linear re-verification policy, the optimal reported carbon intensity for GCs has been provided. Our research reveals that if the actual carbon intensity is larger than historical carbon intensity GCs may report less carbon intensity and conceal actual carbon emission. To deal with this issue, a new exponential re-verification policy is proposed. Based on authentic data from Shenzhen's C&T system, the experimental results show that the government should devote more attention to GCs with a decreasing industrial product output value-added (IVA) than to those with high carbon emissions when selecting GCs for re-verification. Our experiments also illustrate that the new policy outperforms the current one on both total concealed amount of carbon emission and total re-verification cost if the initial re-verification probability is set within a specific range.

[en] Highlights: • This paper studies the sustainable coordination among three supply chain parties. • More green effort is not always equal to more total carbon emission reductions. • Pareto improvement can be achieved for all parties under quantity discount contract. • High cost of sustainability development hampers carbon abatement. • Supply chain coordination leads to better sustainability and profitability. The rapid growth of the green market in recent years has motivated manufacturing companies to operate carbon abatement schemes for better sustainability. This paper investigates sustainability coordination among three major supply chain parties in the context of consumer green awareness by applying a Stackelberg game model. Instead of considering the manufacturer as the only party to operate carbon management schemes, this paper examines a model in which both the supplier and the manufacturer embark on green investment under make-to-order production. Meanwhile, the retailer considers the influence of green consumers on the demand rate and determines the order quantity for the manufacturer. This paper analyses the sustainability and profitability performance of the supply chain under centralised and decentralised scenarios, and applies the quantity discount and cost-sharing contracts to improve supply chain performance. It is shown that greener markets are more profitable and Pareto improvement can be achieved for all parties under a quantity discount contract. High investment cost hinders the company from achieving a higher emission reduction level. Further, increased consumer green awareness can motivate companies to achieve a higher emission reduction level, but not always lead to improved total carbon emission reductions resulting from the increase in product demand caused by green awareness. It also shows the importance of involving suppliers in green investment, due to their high carbon emission during the component production processes. The findings of this research provide theoretical support for supply chain parties to achieve better coordination in balancing profitability and carbon abatement.

[en] Highlights: • Quantify the pricing, green investment and green marketing coordination of supply chain with subsidies under C&T mechanism. • Compare the impacts of two types of subsidy policies on green technology investment and green marketing coordination. • Compare the performances of two subsidy policies on emission reduction and economic growth with the same subsidy budget. • Give suggestions for the government to set forth the requirements for subsidy to promote green technology or reduce emission. In order to promote green technology investment and emission reduction, the government usually provides subsidies to enterprises under the cap-and-trade (C&T) mechanism. Two types of subsidy policies are widely used: one is based on fixed green technology investment cost (FC subsidy) and the other is based on the amount of emission reduction (ER subsidy). This paper investigates the effects of these two government subsidies on the green decisions of a two-echelon supply chain under C&T scheme. Three Stackelberg game models are formulated and analyzed. The analytical results indicate that both manufacturer and retailer tend to collaborate on green marketing when green technology is invested and subsidized. However, the government's subsidy policy cannot guarantee green technology investment and total carbon emission reduction which also depend on the range of green investment cost, emission reduction rate of green technology and the carbon emission intensity of manufacturers. Indeed, higher subsidy will result in the implementation of more expensive but cleaner green technology. With the same subsidy budget, the manufacturer can earn more and emit less under FC subsidy, but ER subsidy can bring more profit to retailer and induce more green production and greater green marketing efforts. Therefore, the government can use FC subsidy on developed and high emission industries to control total emission and adopt ER subsidy on emerging or developing industries to promote their development.