Modelling carbon trading and refrigerated logistics services within a fresh food supply chain under carbon cap-and-trade regulation

Abstract

Carbon cap-and-trade regulation is widely adopted to reduce carbon emissions. Under this regulation, we propose a carbon trading mechanism considering refrigerated logistics services in a fresh food supply chain. In addition to supplying fresh food, the supplier offers refrigerated logistics services and overstocked carbon emission permits to the retailer. We study the decisions on the price of emission permits traded within the supply chain, the retail price and the price of refrigerated logistics services in different carbon trading options, without carbon trade, inner carbon trade, inner and outer carbon trade. Pricing strategies for fresh food, emission permits and refrigerated logistics services are provided for supply chain members. We also reveal the relationship between carbon trading and refrigerated logistics services, and investigate their joint influence on the supplier–retailer cooperative relationship. In addition, it is shown that with the implementation of a transfer payment mechanism, supply chain members are motivated to participate in the carbon trading mechanism, which has advantages including improved resource utilisation and more competitive supply chains.

Keywords:

• carbon trading
• refrigerated logistics services
• carbon cap-and-trade regulation
• fresh food supply chain
• leader–follower game

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [grant number 71390333]; National Key Technology RandD Program of China during the 12th Five-Year Plan Period [grant number 2013BAD19B05]; Science and Technology Planning Project of Jiangsu Province of China [grant number BE2016803]; Postgraduate Research and Practice Innovation Program of Jiangsu Province [grant number KYCX17_0102].