Skip to main content

Advertisement

Log in

Incorporation of life cycle emissions and carbon price uncertainty into the supply chain network management of PVC production

  • S.I.: Integrated Uncertainty in Knowledge Modelling & Decision Making 2018
  • Published:
Annals of Operations Research Aims and scope Submit manuscript

Abstract

Emissions trading schemes have been widely implemented by many countries to enforce the “cap and trade” concept for mitigating CO2 emissions. Thus, the carbon price influences the manufacturing costs in all stages of production, recycling, and disposal. Consideration of the carbon price is especially important for the economic efficiency of the downstream manufacturing sectors, such as in plastic product manufacturing, to substantially reduce their costs through the design and management of networked supply chains, which results in purchasing feedstocks from different technological routes, as well as choosing plants, warehouses and various transportation modes with diverse CO2 emission intensities. Supporting the decision-making in such situations requires the integration of life cycle analysis and networked supply chain management methodologies with an analysis of the carbon-market uncertainties. Such approaches have not been sufficiently quantified in the existing literature. This study presents a stochastic mixed-integer linear programming model developed for polyvinyl chloride pipe manufacturing in China, which is used to evaluate the effects of the life cycle emissions of procurement on the whole supply chain under carbon market uncertainty. Our results illustrate that the carbon market uncertainty would not only significantly influence the carbon-intensive production sectors but also the downstream manufacturing sectors. The five scenarios with carbon price variation exhibit distinctively different choices in procurement and supply chain configurations, as well as in their performances regarding total emissions and associated costs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8
Fig. 9

Similar content being viewed by others

Notes

  1. For certain goods, the costs of the CO2 emissions in the production process are already incorporated in the market price. However, to better illustrate the effects from carbon market uncertainty, we separate this part out of the goods price. Hence, the parameter of the raw material price, prs, is essentially the net price or the carbon-free price without the CO2 emissions costs. Moreover, the costs calculated for life-cycle emissions ensure that the impacts from all the upstream sectors beyond the boundary of the proposed supply chain have been accounted for.

References

  • Allevi, E., Gnudi, A., Konnov, I. V., & Oggioni, G. (2018). Evaluating the effects of environmental regulations on a closed-loop supply chain network: A variational inequality approach. Annals of Operations Research, 261(1), 1–43.

    Article  Google Scholar 

  • Baghalian, A., Rezapour, S., & Farahani, R. Z. (2013). Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case. European Journal of Operational Research, 227(1), 199–215.

    Article  Google Scholar 

  • Bidhandi, H. M., & Yusuff, R. M. (2011). Integrated supply chain planning under uncertainty using an improved stochastic approach. Applied Mathematical Modelling, 35(6), 2618–2630.

    Article  Google Scholar 

  • Chaabane, A., Ramudhin, A., & Paquet, M. (2012). Design of sustainable supply chains under the emission trading scheme. International Journal of Production Economics, 135(1), 37–49.

    Article  Google Scholar 

  • China Chemical Industry Information Center. (2016). China chemical industry yearbook.

  • Choi, T.-M., Govindan, K., Li, X., & Li, Y. (2017). Innovative supply chain optimization models with multiple uncertainty factors. Annals of Operations Research, 257(1–2), 1–14.

    Article  Google Scholar 

  • De Boer, D., Roldao, R., Slater, H., & Qian, G. (2017). The 2017 China Carbon Pricing Survey. China Carbon Forum 2017, Beijing. http://www.chinacarbon.info/wpcontent/uploads/2017/11/2017-China-Carbon-Pricing-Survey.pdf.

  • Dong, J., Zhang, D., Yan, H., & Nagurney, A. (2005). Multitiered supply chain networks: Multicriteria decision—Making under uncertainty. Annals of Operations Research, 135(1), 155–178.

    Article  Google Scholar 

  • Eskandarpour, M., Dejax, P., Miemczyk, J., & Péton, O. (2015). Sustainable supply chain network design: An optimization-oriented review. Omega, 54, 11–32.

    Article  Google Scholar 

  • European Climate Foundation. (2014). Europe’s Low-carbon transition: Understanding the challenges and opportunities for the chemical sector.

  • Fahimnia, B., Sarkis, J., & Eshragh, A. (2015). A tradeoff model for green supply chain planning: A leanness-versus-greenness analysis. Omega, 54, 173–190.

    Article  Google Scholar 

  • Genovese, A., Acquaye, A. A., Figueroa, A., & Koh, S. L. (2017). Sustainable supply chain management and the transition towards a circular economy: Evidence and some applications. Omega, 66, 344–357.

    Article  Google Scholar 

  • Gupta, A., & Maranas, C. D. (2003). Managing demand uncertainty in supply chain planning. Computers and Chemical Engineering, 27(8), 1219–1227.

    Article  Google Scholar 

  • Han, S., Jiang, Y., Zhao, L., Leung, S. C., & Luo, Z. (2017). Weight reduction technology and supply chain network design under carbon emission restriction. Annals of Operations Research. https://doi.org/10.1007/s10479-017-2696-8.

    Article  Google Scholar 

  • ISO. (2006). Environmental management-life cycle assessment-principles and framework.

  • Kharrazi, A., Rovenskaya, E., & Fath, B. D. (2017). Network structure impacts global commodity trade growth and resilience. PLoS ONE, 12(2), e0171184.

    Article  Google Scholar 

  • Kharrazi, A., Sato, M., Yarime, M., Nakayama, H., Yu, Y., & Kraines, S. (2015). Examining the resilience of national energy systems: Measurements of diversity in production-based and consumption-based electricity in the globalization of trade networks. Energy Policy, 87, 455–464.

    Article  Google Scholar 

  • Liu, X., Zhu, B., Zhou, W., Hu, S., Chen, D., & Griffy-Brown, C. (2011). CO2 emissions in calcium carbide industry: An analysis of China’s mitigation potential. International Journal of Greenhouse Gas Control, 5(5), 1240–1249.

    Article  Google Scholar 

  • Ray, P., & Jenamani, M. (2016). Sourcing decision under disruption risk with supply and demand uncertainty: A newsvendor approach. Annals of Operations Research, 237(1), 237–262.

    Article  Google Scholar 

  • Rezaee, A., Dehghanian, F., Fahimnia, B., & Beamon, B. (2017). Green supply chain network design with stochastic demand and carbon price. Annals of Operations Research, 250(2), 463–485.

    Article  Google Scholar 

  • Sarkis, J., Zhu, Q., & Lai, K.-H. (2011). An organizational theoretic review of green supply chain management literature. International Journal of Production Economics, 130(1), 1–15.

    Article  Google Scholar 

  • Shang, J., Wang, L., & Gan, J. (2011). CO2 emissions of PVC production from calcium carbide and coal-based ethylene. Coal Conversion, 34(1), 74–77. (in Chinese).

    Google Scholar 

  • Soleimani, H., Seyyed-Esfahani, M., & Shirazi, M. A. (2016). A new multi-criteria scenario-based solution approach for stochastic forward/reverse supply chain network design. Annals of Operations Research, 242(2), 399–421.

    Article  Google Scholar 

  • Zakeri, A., Dehghanian, F., Fahimnia, B., & Sarkis, J. (2015). Carbon pricing versus emissions trading: A supply chain planning perspective. International Journal of Production Economics, 164, 197–205.

    Article  Google Scholar 

  • Zhou, W., Zhu, B., Chen, D., Zhao, F., & Fei, W. (2014). How policy choice affects investment in low-carbon technology: The case of CO2 capture in indirect coal liquefaction in China. Energy, 73, 670–679.

    Article  Google Scholar 

  • Zhu, B., Zhou, W., Hu, S., Li, Q., Griffy-Brown, C., & Jin, Y. (2010). CO2 emissions and reduction potential in China’s chemical industry. Energy, 35(12), 4663–4670.

    Article  Google Scholar 

  • Zhu, Q., & Geng, Y. (2013). Drivers and barriers of extended supply chain practices for energy saving and emission reduction among Chinese manufacturers. Journal of Cleaner Production, 40, 6–12.

    Article  Google Scholar 

Download references

Acknowledgements

This research was funded by the National Natural Science Foundation of China (71961137012, 71571069, 71704055, 71471063, 71874055), the Humanities and Social Sciences Youth Foundation of Ministry of Education of China (15YJC790136), and the National Science Centre, Poland (2018/30/Q/HS4/00764).

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Wenji Zhou.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ren, H., Zhou, W., Makowski, M. et al. Incorporation of life cycle emissions and carbon price uncertainty into the supply chain network management of PVC production. Ann Oper Res 300, 601–620 (2021). https://doi.org/10.1007/s10479-019-03365-1

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10479-019-03365-1

Keywords

Navigation