This paper studies the manufacturer's financing and ordering decisions and the supplier's price-making decision with or without carbon abatement investment in a two-echelon supply chain consisting of a dominant supplier and a manufacturer, when the product yield is uncertain and consumers have low carbon preferences. The results show that under the cap-and-trade scheme, regardless of whether investment in carbon emission reduction are considered, the manufacturer's financing decision depends on the initial working capital. Further, the yield un...
