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Top-down environmental policies aim to mitigate environmental risks but inevitably lead to economic losses due to the market entry or exit of enterprises. This study developed a universal dynamic agent-based supply chain model to achieve tradeoffs between environmental risk reduction and economic sustainability. The model was used to conduct high-resolution daily simulations of the dynamic shifts in enterprise operations and their cascading effects on supply chain networks. It includes production, consumption, and transportation agents, attributing economic features to supply chain components and capturing their interactions. It also accounts for adaptive responses to daily external shocks and replicates realistic firm behaviors. By coupling high spatial–temporal resolution firm-level data from 18 916 chemical enterprises, this study investigates the economic and environmental impacts of an environmental policy resulting in the closure of 1800 chemical enterprises over three years. The results revealed a significant economic loss of 25.8 billion USD, ranging from 23.8 billion to 31.8 billion USD. Notably, over 80% of this loss was attributed to supply chain propagation. Counterfactual analyses indicated that implementing a staggered shutdown strategy prevented 18.8% of supply chain losses, highlighting the importance of a gradual policy implementation to prevent abrupt supply chain disruptions. Furthermore, the study highlights the effectiveness of a multi-objective policy design in reducing economic losses (about 29%) and environmental risks (about 40%), substantially enhancing the efficiency of the environmental policy. The high-resolution simulations provide valuable insights for policy designers to formulate strategies with staggered implementation and multiple objectives to mitigate supply chain losses and environmental risks and ensure a sustainable future.

Summary: Recent phenomena such as pandemics, geopolitical tensions, and climate change-induced extreme weather events have caused transportation network interruptions, revealing vulnerabilities in the global supply chain. A salient example is the March 2021 Suez Canal blockage, which delayed 432 vessels carrying cargo valued at $92.7 billion, triggering widespread supply chain disruptions. Our ability to model the spatiotemporal ramifications of such incidents remains limited. To fill this gap, we develop an agent-based complex network model integrated with frequently updated maritime data. The Suez Canal blockage is taken as a case study. The results indicate that the effects of such blockages go beyond the directly affected countries and sectors. The Suez Canal blockage led to global losses of about $136.9 ($127.5–$147.3) billion, with India suffering 75% of these losses. Global losses show a nonlinear relationship with the duration of blockage and exhibit intricate trends post blockage. Our proposed model can be applied to diverse blockage scenarios, potentially acting as an early-alert system for the ensuing supply chain impacts. Furthermore, high-resolution daily data post blockage offer valuable insights that can help nations and industries enhance their resilience against similar future events.