Should the carbon tax under carbon footprint management be implemented? The case of new energy vehicles

Carbon footprint management becomes increasingly sophisticated, yet both policymakers and scholars still lack the necessary understanding what impact the implementation of the carbon tax policy based on carbon footprint management will have on supply chain collaborative carbon emissions reduction. Taking new energy vehicles (NEVs) supply chain as an example, we construct a collaborative carbon emissions reduction decision-making model for NEVs supply chain under the Carbon-Footprint-Based Carbon Tax (CFPBCT) policy. Furthermore, we analyze the impact of the CFPBCT policy on environmental outcomes, including carbon emissions per product and total carbon emissions of all products, as well as the impact on economy, including enterprise profits and social welfare. Our findings indicate that the CFPBCT policy could effectively increase carbon reduction investments in the NEVs supply chain, thereby reducing both the carbon emissions per product and total life-cycle carbon emissions. Furthermore, the higher the carbon tax rate, the higher the carbon emissions reduction. However, compared with the traditional carbon tax (TCT) policy, such environmental improvements under CFPBCT are only achieved under favorable conditions-specifically, when firms have strong carbon reduction capabilities and energy prices are low. In contrast, when firms have limited carbon reduction capabilities or when energy prices are high, CFPBCT policy tends to reduce total life-cycle carbon emissions primarily by decreasing product sales, which may in turn lead to reduced profits and diminished social welfare. These findings highlight that the environmental-economic trade-offs under CFPBCT are conditional rather than universal, and the policy should therefore be carefully designed with attention to firm capabilities and energy market conditions. • Study the tax policy based on carbon footprint management (CFPBCT policy). • Obtain the collaborative carbon emissions reduction strategy under CFPBCT policy. • Compared the optimal strategy under current carbon tax policy and CFPBCT policy. • Make reasonable suggestions on government's implementation of CFPBCT policy.