The Impact of Transport Mode and Carbon Policy on Low-Carbon Retailer

Low-carbon retail has become a strategic target for many developed and developing economies. This study discusses the impact of transport mode and carbon policy on achieving this objective. We investigated the retailer transportation mode, pricing, and ordering strategy, which all consider carbon-sensitive demand under the carbon cap-and-trade policy. We analyzed the optimal decision of retailer and their maximum profit affected by transport mode and cap-and-trade policy parameters. Results show that the two elements (cap-and-trade policy and consumer low-carbon awareness) could encourage the retailer to choose low-carbon transportation. The two elements also influence the profit and optimal decision of retailer. Finally, a numerical example is presented to illustrate the applicability of the model.