Högskolan i Skövde

In response to increasing environmental concerns, many governments have implemented carbon tax policies to incentivize green technology investments. However, the impact of such policies on supply chain coordination, particularly when retailers are risk-averse, remains underexplored. This study investigates a two-tier supply chain where manufacturers invest in green technology and retailers engage in marketing activities within the framework of a carbon tax policy. Motivated by the need to understand how carbon taxes affect strategic decisions and profitability, we analyze the decisions of risk-averse retailers using a mean-variance approach. Our findings indicate that carbon tax policy significantly influences green initiatives and may present challenges to manufacturers and overall supply chain profitability. To address these challenges, we propose both non-contractual and contractual coordination strategies aimed at enhancing the performance of decentralized channels for risk-averse retailers. The comparison of these strategies reveals that the optimal coordination approach is contingent upon the marketing effect and the level of retailer risk aversion. Specifically, a green investment cost-sharing strategy is optimal for maximizing supply chain profit when both retailer risk aversion and the marketing effect are high. Conversely, a marketing effort cost-sharing strategy is more effective in minimizing environmental impact when retailer risk aversion is medium or high and the marketing effect is substantial. This study makes significant contributions by elucidating the interplay between risk aversion, marketing effects, and green technology investments. It provides valuable managerial insights for decision-makers seeking to foster sustainable development in supply chains through the selection of appropriate coordination strategies.