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Analysis of low-carbon strategies in supply chain with governmental intervention

Recently, issues of carbon emissions are becoming more and more prominent, resulting in serious environmental problems. Many governments take actions to help enterprises to manufacture and sale products environmentally. This paper studies the impact of governmental intervention on the low-carbon strategies of the inter-organizations. Using the differential Stackelberg game model, a supply chain consisting of one manufacturer and one retailer is studied. Two situations including the market-base scenario and government-base scenario are considered. The optimal strategies of the effort on emission reduction and the retail price in these two situations are solved and compared. The results show that government's participation in regulation improves manufacturer's emission reduction effort and retailer's retail price. The numerical analysis further confirms the research results.