Abstract

Carbon cap-and-trade is installed in many countries to give economic incentives for Greenhouse Gas (GHG) reduction. Each country or region introduced individual carbon market, so that GHG emission allowance, and carbon price differ in countries. However, since a supply chain network is constructed globally, different GHG emission allowance and carbon price among countries need to be considered simultaneously for GHG reduction with an affordable cost using carbon cap-and-trade system. Moreover, custom duty, FTAs, GHG emissions, procurement costs are also different among countries due to different energy mix and economic situations. This study models a global supply chain network with custom duty, FTAs, and carbon cap-and-trade under different GHG emission allowance, and carbon price among countries using integer programming. Sensitivity analysis of carbon price is conducted to analyze impacts on total costs, GHG emissions, and supply chain configuration. It was found cases in the numerical experiments that required carbon price in 2030 and 2050 to reduce GHG emissions such as 215 and 670 [USD/t-CO2eq] were effective for GHG and cost reductions under carbon cap-and-trade.