IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v18y2021i16p8293-d608874.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/18/16/8293/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/18/16/8293/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zou, Zong-Bao & Wang, Jian-Jun & Deng, Gui-Shi & Chen, Haozhe, 2016. "Third-party remanufacturing mode selection: Outsourcing or authorization?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 87(C), pages 1-19.
    2. Chen, Yuyu & Li, Bangyi & Zhang, Guoqing & Bai, Qingguo, 2020. "Quantity and collection decisions of the remanufacturing enterprise under both the take-back and carbon emission capacity regulations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    3. Heydari, Jafar & Govindan, Kannan & Sadeghi, Razieh, 2018. "Reverse supply chain coordination under stochastic remanufacturing capacity," International Journal of Production Economics, Elsevier, vol. 202(C), pages 1-11.
    4. Senlin Zhao & Qinghua Zhu, 2017. "Remanufacturing supply chain coordination under the stochastic remanufacturability rate and the random demand," Annals of Operations Research, Springer, vol. 257(1), pages 661-695, October.
    5. Li, Jianzhi & González, Miguel & Zhu, Yun, 2009. "A hybrid simulation optimization method for production planning of dedicated remanufacturing," International Journal of Production Economics, Elsevier, vol. 117(2), pages 286-301, February.
    6. Zhang, Yunrong & Hong, Zhaofu & Chen, Zhixiang & Glock, Christoph H., 2020. "Tax or subsidy? Design and selection of regulatory policies for remanufacturing," European Journal of Operational Research, Elsevier, vol. 287(3), pages 885-900.
    7. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    8. Govindan, Kannan & Popiuc, Maria Nicoleta, 2014. "Reverse supply chain coordination by revenue sharing contract: A case for the personal computers industry," European Journal of Operational Research, Elsevier, vol. 233(2), pages 326-336.
    9. Tong Shu & Zhizhen Peng & Shou Chen & Shouyang Wang & Kin Keung Lai & Honglin Yang, 2017. "Government Subsidy for Remanufacturing or Carbon Tax Rebate: Which Is Better for Firms and a Low-Carbon Economy," Sustainability, MDPI, vol. 9(1), pages 1-22, January.
    10. Mitra, Supriya & Webster, Scott, 2008. "Competition in remanufacturing and the effects of government subsidies," International Journal of Production Economics, Elsevier, vol. 111(2), pages 287-298, February.
    11. Lu, Zhijian & Shao, Shuai, 2016. "Impacts of government subsidies on pricing and performance level choice in Energy Performance Contracting: A two-step optimal decision model," Applied Energy, Elsevier, vol. 184(C), pages 1176-1183.
    12. Jian Li & Weihao Du & Fengmei Yang & Guowei Hua, 2014. "The Carbon Subsidy Analysis in Remanufacturing Closed-Loop Supply Chain," Sustainability, MDPI, vol. 6(6), pages 1-17, June.
    13. R. Canan Savaskan & Shantanu Bhattacharya & Luk N. Van Wassenhove, 2004. "Closed-Loop Supply Chain Models with Product Remanufacturing," Management Science, INFORMS, vol. 50(2), pages 239-252, February.
    14. Gökçe Esenduran & Eda Kemahlıoğlu-Ziya & Jayashankar M. Swaminathan, 2017. "Impact of Take-Back Regulation on the Remanufacturing Industry," Production and Operations Management, Production and Operations Management Society, vol. 26(5), pages 924-944, May.
    15. Zhang, Y & Hong, Z & Chen, Z & Glock, C. H., 2020. "Tax or subsidy? Design and selection of regulatory policies for remanufacturing," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 122326, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    16. Zhao, LiuWei & Chang, Jianwei & DU, Jianguo, 2019. "Dynamics analysis on competition between manufacturing and remanufacturing in context of government subsidies," Chaos, Solitons & Fractals, Elsevier, vol. 121(C), pages 119-128.
    17. Ata Allah Taleizadeh & Mahsa Noori-daryan & Kannan Govindan, 2016. "Pricing and ordering decisions of two competing supply chains with different composite policies: a Stackelberg game-theoretic approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(9), pages 2807-2836, May.
    18. He, Peng & He, Yong & Xu, Henry, 2019. "Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy," International Journal of Production Economics, Elsevier, vol. 213(C), pages 108-123.
    19. Kaiying Cao & Ping He & Zhixin Liu, 2020. "Production and pricing decisions in a dual-channel supply chain under remanufacturing subsidy policy and carbon tax policy," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 71(8), pages 1199-1215, August.
    20. Huimin Bi & Hao Xiao & Kejuan Sun, 2019. "The Impact of Carbon Market and Carbon Tax on Green Growth Pathway in China: A Dynamic CGE Model Approach," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(6), pages 1312-1325, May.
    21. Alegoz, Mehmet & Kaya, Onur & Bayindir, Z. Pelin, 2021. "A comparison of pure manufacturing and hybrid manufacturing–remanufacturing systems under carbon tax policy," European Journal of Operational Research, Elsevier, vol. 294(1), pages 161-173.
    22. Hu, Shu & Dai, Ying & Ma, Zu-Jun & Ye, Yu-Sen, 2016. "Designing contracts for a reverse supply chain with strategic recycling behavior of consumers," International Journal of Production Economics, Elsevier, vol. 180(C), pages 16-24.
    23. Tong Shu & Chunfen Huang & Shou Chen & Shouyang Wang & Kin Keung Lai, 2018. "Trade-Old-for-Remanufactured Closed-Loop Supply Chains with Carbon Tax and Government Subsidies," Sustainability, MDPI, vol. 10(11), pages 1-25, October.
    24. Bian, Junsong & Zhao, Xuan, 2020. "Tax or subsidy? An analysis of environmental policies in supply chains with retail competition," European Journal of Operational Research, Elsevier, vol. 283(3), pages 901-914.
    25. Ullah, Mehran & Sarkar, Biswajit, 2020. "Recovery-channel selection in a hybrid manufacturing-remanufacturing production model with RFID and product quality," International Journal of Production Economics, Elsevier, vol. 219(C), pages 360-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xuemei Zhang & Jiawei Hu & Suqin Sun & Guohu Qi, 2022. "Extended Warranty Strategy and Its Environment Impact of Remanufactured Supply Chain," IJERPH, MDPI, vol. 19(3), pages 1-25, January.
    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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Yunting Feng & Yong Geng & Ge Zhao & Mengya Li, 2022. "Carbon Emission Constraint Policy in an OEM and Outsourcing Remanufacturer Supply Chain with Consumer Preferences," IJERPH, MDPI, vol. 19(8), pages 1-16, April.
    3. Fangfang Zhang & Hao Wang & Xiaoyu Wu, 2021. "The Impact of Government Subsidies on Single-Channel Recycling Based on Recycling Propaganda," Energies, MDPI, vol. 14(23), pages 1-14, December.
    4. Biao Li & Yong Geng & Xiqiang Xia & Dan Qiao, 2021. "The Impact of Government Subsidies on the Low-Carbon Supply Chain Based on Carbon Emission Reduction Level," IJERPH, MDPI, vol. 18(14), pages 1-19, July.
    5. Lijun Meng & Qiang Qiang & Zuqing Huang & Baoyou Zhang & Yuxiang Yang, 2020. "Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer," Sustainability, MDPI, vol. 12(6), pages 1-29, March.
    6. Liu, Zhi & Li, Kevin W. & Tang, Juan & Gong, Bengang & Huang, Jun, 2021. "Optimal operations of a closed-loop supply chain under a dual regulation," International Journal of Production Economics, Elsevier, vol. 233(C).
    7. Pietro De Giovanni & Georges Zaccour, 2022. "A selective survey of game-theoretic models of closed-loop supply chains," Annals of Operations Research, Springer, vol. 314(1), pages 77-116, July.
    8. Zhang, Ling & Zhang, Zheng, 2022. "Dynamic analysis of the decision of authorized remanufacturing supply chain affected by government subsidies under cap-and-trade policies," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).
    9. Pietro Giovanni & Georges Zaccour, 2019. "A selective survey of game-theoretic models of closed-loop supply chains," 4OR, Springer, vol. 17(1), pages 1-44, March.
    10. Luo, Li & Shan, Renbang & Xiang, Jie, 2024. "The government intervention effectiveness in promoting remanufacturing: Subsidy or remanufacturing target?," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    11. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    12. You Qiu & Youliang Jin, 2022. "Impact of environmental taxes on remanufacturing decisions of a duopoly," Economic Change and Restructuring, Springer, vol. 55(4), pages 2479-2498, November.
    13. Zichun Deng & Mohd Rizaimy Shaharudin & Ming-Lang Tseng, 2023. "Decision-Making in a Closed-Loop Supply Chain under Fairness Concerns and Optimal Subsidies," Sustainability, MDPI, vol. 15(9), pages 1-31, April.
    14. Fang, Chang & Fan, Shuyi & Chi, Mingxiang & Wang, Weizhong, 2023. "The optimal remanufacturing strategy, returned quality choice and independent remanufacturers’ advantage for tackling extreme weather," International Journal of Production Economics, Elsevier, vol. 259(C).
    15. Dexiang Yang & Qin Yang & Lei Zhang, 2023. "Operational Decisions on Remanufacturing under the Product Innovation Race," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    16. Matsui, Kenji, 2023. "Dual-recycling channel reverse supply chain design of recycling platforms under acquisition price competition," International Journal of Production Economics, Elsevier, vol. 259(C).
    17. 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.
    18. Zhang, Abraham & Wang, Jason X. & Farooque, Muhammad & Wang, Yulan & Choi, Tsan-Ming, 2021. "Multi-dimensional circular supply chain management: A comparative review of the state-of-the-art practices and research," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    19. Renbang Shan & Li Luo & Baoli Shi, 2023. "The choice of recycling strategies for decision-makers based on government subsidy and service budget," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1441-1472, February.
    20. Taleizadeh, Ata Allah & Sadeghi, Razieh, 2019. "Pricing strategies in the competitive reverse supply chains with traditional and e-channels: A game theoretic approach," International Journal of Production Economics, Elsevier, vol. 215(C), pages 48-60.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:18:y:2021:i:16:p:8293-:d:608874. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.