Modelling carbon trading and refrigerated logistics services within a fresh food supply chain under carbon cap-and-trade regulation

Carbon cap-and-trade regulation is widely adopted to reduce carbon emissions. Under this regulation, we propose a carbon trading mechanism considering refrigerated logistics services in a fresh food supply chain. In addition to supplying fresh food, the supplier offers refrigerated logistics services and overstocked carbon emission permits to the retailer. We study the decisions on the price of emission permits traded within the supply chain, the retail price and the price of refrigerated logistics services in different carbon trading options, without carbon trade, inner carbon trade, inner and outer carbon trade. Pricing strategies for fresh food, emission permits and refrigerated logistics services are provided for supply chain members. We also reveal the relationship between carbon trading and refrigerated logistics services, and investigate their joint influence on the supplier-retailer cooperative relationship. In addition, it is shown that with the implementation of a transfer payment mechanism, supply chain members are motivated to participate in the carbon trading mechanism, which has advantages including improved resource utilisation and more competitive supply chains.