Allocation of Greenhouse Gas Emissions in Supply Chains
نویسندگان
چکیده
Globalization, which exports production and jobs from rich countries to poor countries, also exports from rich countries to poor countries the greenhouse gas (GHG) emissions created from the production of the goods consumed by rich countries. But whose responsibility are the GHG emissions? Are they exclusively the responsibility of the producing countries, or exclusively the responsibility of the consuming countries? Or, perhaps, the responsibility for the GHG emissions should be shared by both the producers and the consumers? It is suggested in the literature that some level of double counting of carbon footprinting should be allowed in order to induce optimal effort levels for emission reduction by supply chain members. However, such double counting may reduce the credibility of carbon-offsetting initiatives. In this paper we formulate the GHG emission responsibility (GGER) problem as a cooperative game, referred to as the GGER game, and use cooperative game theory methodology to suggest allocations of GHG responsibility among the various parties in the supply chain. We prove that the GGER game is convex, and thus has a non-empty core, and we identify some easily implementable allocations as extreme core points. We further derive an explicit expression for the Shapley value of the GGER game, which is shown to have a very simple and intuitive interpretation. A Shapley value allocation of the GHG emission responsibilities induces supply chain members to invest in GHG emission reduction, and avoids the potential problem of double counting in supply chain carbon footprinting.
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