CONTRIBUTION TO KNOWLEDGE

The main purpose of this thesis is to assess the impact of carbon emission policies on reverse and forward logistics supply chain networks, which are paper recycling and the fresh produce industry, respectively. As discussed in Chapter 2, the literature suggests that carbon emissions is an important issue nowadays as it affects all human life. The implementation of carbon emission policies to control carbon emissions has an impact on the strategic and operational decisions in all industries, particularly in the paper recycling industry and fresh produce industry.

Chapter 3 demonstrates the methodology used to carry out the analysis. The formulation of both optimisation models is explained. Both primary data and secondary data are used for analysis. Primary data are given by a paper recycling company in Kent and a fresh produce company in Liverpool. Secondary data are obtained from the literature, such as white papers, journals and publications. The development of the models is then described in Chapter 4. The selection of the locations is shown. In the reverse logistics supply chain network, the

127

selection of material recycling facilities and paper mills for the paper recycling case are shown. In the forward logistics case, regional distribution centres are grouped into a number of clusters and the average distance is determined.

In Chapter 5 the analysis of the results are presented. The impact of both carbon tax and carbon emissionstrading policies to the reverse and forward logistics supply chain networks are determined. In general, the results in this chapter indicate that: (1) for the reverse logistics supply chain network, with no carbon emissions charge, exporting the waste paper overseas incurs less cost for the overall network. Under the current charge, the situation of an optimal solution is still the same. Therefore, it shows that the reverse logistics network has no impact on strategic planning with the current carbon charge. However, there is an impact on the overall total cost that has been increased due to the extra costs for carbon. (2) For the forward logistics supply chain network, in minimising total costs and travel time, road transportation is the best option with no carbon emissions policies implemented. Currently the company that we are dealing with does not pay for carbon emissions. However their direction is now towards paying for their carbon emissions. Multimodal transportation planning is an option to reduce carbon emissions. Instead of using roads for distributing the fresh produce to the regional distribution centre, multimodal, which is rail, is considered in this study. Although rail has lower carbon emissions than road, the extent to which the rail transportation is beneficial should be determined (Li, 2011). Depending on the carbon charge, the analysis in this study shows the extent to which multimodal using rail is an option to be chosen instead of road transportation.

128

The findings of the carbon charge rate are expected to be a useful guideline for the government when making decisions on the rate of carbon to be charged, especially for carbon tax, as the government controls the tax rate under this policy. Although the carbon charge in carbon emissions trading policy is determined by the demand supply in the carbon market, the government still has the authority to determine carbon limits for each industry. It is also expected in the future that the carbon limit will be set by the government to a smaller level, for instance, a carbon limit for each company. This will have a better impact on the planning for each company towards reducing carbon emissions. This carbon charge rate is useful for the paper recycling and fresh produce industry as they can see the impact of the carbon charge on their strategic and operations planning. Currently the carbon is charged, and, according to the analysis carried out from the optimisation model, there is no impact on the strategic and operations planning of these industries. The carbon charge might be increased but with this impact of different rates of carbon charge to the paper recycling and fresh produce network will show that if the carbon is charged at more than £211 per tonne for paper recycling industry and £239 per tonne for the fresh produce industry, there will be an impact on the strategic and operations planning in paper recycling and fresh produce industry, respectively.

Paper recycling is not much different from other recycling materials. The network for paper recycling can be generalised for other recycling materials. If it is not recycled, the waste paper as well as other recycling materials like glass, metal and plastic are sent to landfill together with other household waste. The fresh produce industry on the other hand is focusing the impact of carbon emissions policies on the selection of transportation mode with consideration of multimodal transportation planning. This industry can also be generalised to

129

other industries that have an option for using multimodal transportation planning in their operations.

The study has quantitatively explored potential behavioral changes in a multimodal context, when carbon emission policies are applied to the industry. Logistics service provider would be benefited from the logistics network design approach through developing optimal multimodal transportation strategies with the given carbon policies. The research would also be able to significantly contribute to government policy making for carbon emission control. With understanding of the policy impacts on logistics network configurations, effective carbon control policies could be established to reduce carbon emission, and encourage cost effective and environment friendly transportations.