Must Pollution Abatement Harm the Supplier in a Multi-Echelon Supply Chain?

Abstract

This paper studies the welfare effects of the abatement cost burden of a supplier in a multi-echelon supply chain. We theoretically show that the profits of all echelons other than the supplier become lower when the supplier contributes more to the abatement. Also, we computationally show that the profit of the supplier may be higher when it makes a small amount of contribution to the abatement provided that the demand curve faced by the retailer is sufficiently linear. © 2024 Elsevier B.V.