Low-carbon supply policies and supply chain performance with carbon concerned demand

A dilemma between economic growth and environmental deterioration has never been recognized so seriously until the environmental problem has been impacting everyone’s daily life cogently (e.g., the serious fog and haze in China). Simultaneously, the rising environment awareness of consumers leads to the close attention to the product’s carbon performance reflected in the carbon concerned demand, which provides opportunity to rebuild our business ecosystem. The paper expands the environment view to supply chain operations. A Stackelberg-like model is developed to game-theoretically analyze the decentralized decisions of the manufacturer and retailer. Low-carbon effort is brought into decision by both sides. The centralized decision-making is also investigated as a benchmark to evaluate the supply chain performance. Additionally,we propose a carbon-related price–discount sharing-like scheme to achieve the channel coordination and discuss the possibility of Pareto improvement. Several interesting managerial insights on low-carbon factors are concluded.