How to make low-carbon supply chain decisions: considering technology spillover and unit R&D costs

In the context of low-carbon economic development, the vertical spillover effects of emission reduction technologies and the unit cost of emission reduction (CRICF) within supply chains significantly influence firms’ emission reduction decisions and profit distribution. This study investigates the impacts of vertical spillover effects of emission reduction technologies (SCERT) and CRICF on decision-making and coordination in low-carbon supply chains, exploring supply chain decision models under different scenarios and their effects on firm profits, consumer surplus, and social welfare. The primary findings are as follows: First, an increase in SCERT significantly enhances the emission reduction technology levels of both upstream and downstream firms in the supply chain, while also driving up product prices; however, SCERT does not affect the proportion of emission reduction levels between suppliers and manufacturers. Second, under both centralized and decentralized decision-making frameworks, an increase in CRICF reduces firms’ emission reduction technology levels and profits, and differences in CRICF between suppliers and manufacturers influence their respective emission reduction decisions and profit allocation. Third, the centralized decision-making model outperforms the decentralized model in terms of supply chain profits, market demand, consumer surplus, and social welfare. Finally, this study designs a Nash bargaining mechanism, demonstrating its effectiveness in coordinating the supply chain and achieving Pareto improvements in profits for both suppliers and manufacturers. The results suggest that enhancing the research and development of emission reduction technologies, strengthening technical exchanges between upstream and downstream supply chain entities, improving firms’ bargaining power, and increasing consumers’ low-carbon preferences are critical to promoting coordination and sustainable development in low-carbon supply chains. This research provides theoretical support for firms’ decision-making under the constraints of emission reduction technology spillovers and costs, while offering managerial insights for policymakers.