Internalization of negative external cost of green logistics and incentive mechanism

The implementation of green logistics can reduce increasingly serious environmental damage while improving the operating efficiency of logistics enterprises. In this article, through quantitative calculation of logistics negative external costs, including traffic accidents, atmospheric pollution, no...

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Bibliographic Details
Main Authors: Zhanzhong Wang, Zhouling Tsai, Jing Fu, Liying Zhao, Lili Yang
Format: Article
Language:English
Published: SAGE Publishing 2017-08-01
Series:Advances in Mechanical Engineering
Online Access:https://doi.org/10.1177/1687814017715420
Description
Summary:The implementation of green logistics can reduce increasingly serious environmental damage while improving the operating efficiency of logistics enterprises. In this article, through quantitative calculation of logistics negative external costs, including traffic accidents, atmospheric pollution, noise pollution, and pollution caused by packaging, we build accounting standards to calculate the negative external costs of logistics enterprises that generate pollution mainly from transportation and packaging. Then, assuming the impetus provided by the government implementing incentive mechanisms in a free market economy, we establish a “Logistics Negative External Cost Internalization” model. This model quantitatively analyzes the relationships among freight rate, freight volume, investment of enterprise for implementing green logistics, and the subsidies given by government, under the comparison of the two modes “enterprise operates first” and “government subsidizes first.” The results show that the introduction of the “government subsidizes first” incentive mechanism and increasing freight rate are helpful in promoting the process of logistics market greening.
ISSN:1687-8140