Vulnerability of exporting nations to the development of a carbon label in the United Kingdom

Carbon labels inform consumers about the amount of greenhouse gases (GHGs) released during the production and consumption of goods, including food. In the future consumer and legislative responses to carbon labels may favour goods with lower emissions, and thereby change established supply chains. This may have unintended consequences. We present the carbon footprint of three horticultural goods of different origins supplied to the United Kingdom market: lettuce, broccoli and green beans. Analysis of these footprints enables the characterisation of three different classes of vulnerability which are related to: transport, national economy and supply chain specifics. There is no simple relationship between the characteristics of an exporting country and its vulnerability to the introduction of a carbon label. Geographically distant developing countries with a high level of substitutable exports to the UK are most vulnerable. However, many developing countries have low vulnerability as their main exports are tropical crops which would be hard to substitute with local produce. In the short term it is unlikely that consumers will respond to carbon labels in such a way that will have major impacts in the horticultural sector. Labels which require contractual reductions in GHG emissions may have greater impacts in the short term.

Non-stationary stochastic inventory lot-sizing with emission and service level constraints in a carbon cap-and-trade system

Firms worldwide are taking major initiatives to reduce the carbon footprint of their supply chains in response to the growing governmental and consumer pressures. In real life, these supply chains face stochastic and non-stationary demand but most of the studies on inventory lot-sizing problem with emission concerns consider deterministic demand. In this paper, we study the inventory lot-sizing problem under non-stationary stochastic demand condition with emission and cycle service level constraints considering carbon cap-and-trade regulatory mechanism. Using a mixed integer linear programming model, this paper aims to investigate the effects of emission parameters, product- and system-related features on the supply chain performance through extensive computational experiments to cover general type business settings and not a specific scenario. Results show that cycle service level and demand coefficient of variation have significant impacts on total cost and emission irrespective of level of demand variability while the impact of product's demand pattern is significant only at lower level of demand variability. Finally, results also show that increasing value of carbon price reduces total cost, total emission and total inventory and the scope of emission reduction by increasing carbon price is greater at higher levels of cycle service level and demand coefficient of variation. The analysis of results helps supply chain managers to take right decision in different demand and service level situations.