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Supply Chain Modelling Under Carbon Trading

Supply Chain Modelling Under Carbon Trading
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Author(s): Nidhi M. B. (National Institute of Technology Calicut, India)and V. Madhusudanan Pillai (National Institute of Technology Calicut, India)
Copyright: 2019
Pages: 18
Source title: Emerging Applications in Supply Chains for Sustainable Business Development
Source Author(s)/Editor(s): M. Vijaya Kumar (National Institute of Technology Warangal, India), Goran D. Putnik (University of Minho, Portugal), K. Jayakrishna (Vellore Institute of Technology University, India), V. Madhusudanan Pillai (National Institute of Technology Calicut, India)and Leonilde Varela (University of Minho, Portugal)
DOI: 10.4018/978-1-5225-5424-0.ch016

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Abstract

In the recent decades, carbon footprint assessment of an activity has been emerging as a major research area. The carbon trading called “CAP and TRADE system” is evolved out of the Kyoto Protocol and emission trading schemes and is experimented across countries to encourage organizations to control emission. The region or country fixes the CAP which is the limit for emissions emitted by an organization. This chapter depicts the performance evaluation of a supply chain under the carbon cap and trade scheme. A mathematical model is proposed which considers carbon emissions as a result of supply chain operation, carbon trading among members of the supply chain, and carbon trading with members of outside supply chain. A mixed integer linear programming (MILP) model is proposed for the performance evaluation of a forward supply chain having 4 stages. The analysis shows that carbon trading allows economic benefits as well as environmental benefits.

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