Table 8 was used to compare the results obtained from the four
scenarios. It was found that total CO2 emissions decrease as the
social costs rates of CO2 emissions increase. The results showed that
if enterprises have to pay the social costs of CO 2 emissions caused
by their operations of supply chain networks, the decision makers
of these enterprises will make optimal strategies to make tradeoffs
between the operational costs and CO2 emissions. Therefore, the
decision-makers of enterprises would choose plants that emit less
CO2 gas, even though those plants have higher costs for production.
This is because the overall amount of costs would be less than those
of plants that do not take CO2 emissions into serious account. Thus,
the authors of this study suggest that governments should impose
rules to force enterprises to pay for the social costs of CO2
emissions. This would cause enterprises to invest money in
reducing CO2 emissions.
5.3. Sensitivity analysis under different social cost rates of CO2
emissions
We investigate the change in total CO2 emissions based on
different social cost rates of CO2 emissions. Thus, a sensitivity
analysis considering social cost rate of CO2 was carried out. We
observed the change of total CO2 emissions and total costs by
varying the social cost rate of CO2 emissions. The results are given
as graphs in Figs. 5 and 6 for the total CO2 emissions, and total costs,
respectively. The social cost of CO2 emissions varies from 0 to $ 200/
ton. In these two figures, we can see how the social cost rate of CO2
emissions impacts total CO2 emissions and total costs under
different social cost rates of CO2 emissions. Also, we can see that as
the social cost rate of CO2 emissions increases, the total CO2
emissions decreases and total costs increases, respectively.
6. Conclusion
The reduction of CO2 emissions to mitigate the impacts of global
warming has become an urgent issue globally. Bearing this in mind,
the authors of this study have highlighted the significance of taking
social costs of CO2 emissions into consideration in supply chain
management, and have presented a generic mathematical model
considering both operational costs and social costs of CO2 emissions
to assist decision makers in supply chain management.
The inclusion of social costs in supply chain management could
allow decision-makers of enterprises to estimate more practical
costs in the operations of supply chain networks. The proposed
model has the potential to become a useful tool that facilitates the
understanding of optimal supply chain strategies with consideration
for social costs of CO2 and other wastes emissions resulting
from operating such a supply chain network. In addition, the proposed
model could serve as a useful reference for legislators in
estimating the monetary loss resulting from CO2 emissions in the
operations of supply chain networks. Furthermore, the legislators
could refer this model to propose legislations to enforce the enterprises
to pay for the social costs of CO2 emissions. Therefore, the
enterprises must invest money in reducing CO2 emissions from the
operations of such supply chain networks.
Although the proposed mathematical model has made a noteworthy
contribution to current studies on SSCM, it also has its
limitations. First, the estimation that we did regarding the calculation
of the social costs of CO2 emissions in supply chain management
can only be seen as tentative at this preliminary stage.
Second, as showed in our illustrative case wherewe took an apparel
manufacturing supply chain network as an example, further studies
can apply this model to other industries. Third, the proposed model
is particularly suitable for the multinational enterprises that own
many manufacturing plants located in different countries. Last, the
social costs of other wastes emissions caused by the operations of
supply chain network could be considered in further studies.