Pricing and low-carbon investment decisions in an emission dependent supply chain under a carbon labelling scheme

Yonghong Cheng, Hui Sun, Fu Jia*, S. C. Lenny Koh

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


A low-carbon policy attracts the interests of businesses, consumers, and policy makers. The purpose of this paper is to investigate how a carbon labelling scheme could be integrated into operational decision-making for manufacturers and retailers. Three game theoretic models of a supply chain with one manufacturer and one retailer are built to investigate a manufacturer and retailer's pricing and investment decision for products with different initial carbon footprints considering consumer environmental awareness. Through a systematic comparison and numerical analysis, the results show that a carbon labelling scheme can significantly reduce the overall carbon emission supply chain and have an initially negative impact on the manufacturer and retailer's profits. However, in the medium-long run, manufacturers and retailers could yet achieve profitability through continuously investing in low-carbon technology.

Original languageEnglish
Article number1238
Pages (from-to)1-17
Number of pages17
Issue number4
Publication statusPublished - 18 Apr 2018

Bibliographical note

© 2018 by the authors.


  • Carbon labelling scheme
  • Consumer environmental awareness
  • Game theory
  • Product carbon footprint (PCF)
  • Supply chain

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