Optimal carbon tax design for achieving low carbon supply chains

Abstract

This research addresses the timely challenge of climate changes by investigating how a carbon emissions taxation scheme can be designed to reduce carbon emissions without hindering long-term economic development. Considering different power structures and green technology investment efficiencies, this research examines the optimal carbon tax design with respect to several key supply chain features. Our findings show that no matter whether customers are sensitive to the carbon emissions or not, the carbon tax should be differentiated across industry sectors, and the supply chain power structure and cost efficiencies in carbon emissions reduction should be taken into account. It is also crucial to have the proper channel leadership to achieve the sustainability objectives