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Comparatively Analyzing the Impact of Government Subsidy and Carbon Tax Policy on Authorized Remanufacturing

Author

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  • Biao Li

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

  • Yong Geng

    (College of Environmental Science and Engineering, Shanghai Jiao Tong University, Shanghai 200240, China)

  • Xiqiang Xia

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

  • Dan Qiao

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

  • Hao Wang

    (Department of Geography and Planning, University of Toronto, Toronto, ON M5S 3G3, Canada)

Abstract

Authorized remanufacturing is an important means to achieve green manufacturing and carbon neutrality. In this study, a game theory model between a manufacturer and a remanufacturer was constructed to analyze the impact of government subsidies and carbon tax policies on authorized remanufacturing. Based on the game theory model, the effects of two government policies on the optimal solution, namely, the unit cost of remanufacturing product authorization and the waste product recovery rate, were compared and analyzed. This analysis could provide a reference for the government to improve and formulate relevant remanufacturing policies. The main results are as follows: government subsidy policies may increase the unit cost of remanufacturing product authorization and the rates of waste product recovery; government carbon tax policies may not affect the unit cost of remanufacturing product authorization, and increase the rates of waste product recovery; the government subsidy policy may not affect the unit retail price of new products, and reduces the unit retail price of remanufactured products; the government subsidy and carbon tax policies may reduce sales of new products and increase sales of remanufactured products; the government subsidies may increase the revenue of the original equipment manufacturer (OEM) and the remanufacturer; and the government carbon tax policies may increase the revenue of the remanufacturer. However, government carbon tax policies increase the revenue of the OEM only when the new product carbon tax amount is higher than a certain threshold. The impact of the two policies on the environment is related to the ratio of the two products’ impact on the environment, i.e., the quota ratio between the unit government carbon tax of the new product and the unit government subsidy of the remanufactured product. Finally, the consumer surplus is maximized when the government adopts the subsidy policy and lowest when the government adopts the carbon tax policy.

Suggested Citation

  • Biao Li & Yong Geng & Xiqiang Xia & Dan Qiao & Hao Wang, 2021. "Comparatively Analyzing the Impact of Government Subsidy and Carbon Tax Policy on Authorized Remanufacturing," IJERPH, MDPI, vol. 18(16), pages 1-18, August.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:16:p:8293-:d:608874
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    References listed on IDEAS

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    Cited by:

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    2. Qiuyue Li & Hao Wang & Zhenshan Li & Shangwei Yuan, 2022. "A Comparative Study of the Effect of Different Carbon-Reduction Policies on Outsourcing Remanufacturing," IJERPH, MDPI, vol. 19(6), pages 1-22, March.
    3. Xiqiang Xia & Mengya Li & Biao Li & Hao Wang, 2021. "The Impact of Carbon Trade on Outsourcing Remanufacturing," IJERPH, MDPI, vol. 18(20), pages 1-18, October.
    4. Menglin Zhan & Yan Chen, 2022. "Vehicle Company’s Decision-Making to Process Waste Batteries: A Game Research under the Influence of Different Government Subsidy Strategies," IJERPH, MDPI, vol. 19(21), pages 1-17, October.
    5. De, Arijit & Ray, Ankita & Kundu, Tanmoy & Sheu, Jiuh-Biing, 2023. "Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).

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