Recycling and remanufacturing or technology upgrading? emission reduction decisions of supply chain under carbon cap-and-trade mechanism
Xiaoyuan Wu, Wenqing Miao, Xingxian Zhang, Wenjin Zuo, Bingliang Shen
TL;DR
This paper compares two carbon reduction methods in supply chains under a cap-and-trade system and finds that raising carbon prices encourages better emission reductions.
Contribution
The study introduces a Stackelberg game model to compare recycling & remanufacturing versus technology upgrading under cap-and-trade.
Findings
Recycling and remanufacturing yield higher profits for manufacturers when consumer price sensitivity is low.
Technology upgrading leads to better emission reduction effects compared to recycling and remanufacturing.
Increasing carbon trading prices enhances emission reductions and lowers total carbon emissions in both methods.
Abstract
Cap-and-trade mechanism can efficiently reduce carbon emissions, which makes it widely used around the world. This paper builds a Stackelberg game model for a manufacturer-led secondary supply chain and analyzes the best pricing, carbon reduction strategies, and the impacts of each variable on equilibrium results when using two emission reduction methods, recycling & remanufacturing, and technology upgrading under the cap-and-trade mechanism. The relationship between the variables was verified through case studies, and the economic benefits and emission reduction effects of the two emission reduction methods were compared. It is found that manufacturers’ profit in the recycling and remanufacturing mode is higher compared to that of the technology upgrading mode when consumer price sensitivity coefficient is low, but its emission reduction effect is less effective; raising the price of…
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Taxonomy
TopicsSustainable Supply Chain Management · Energy, Environment, and Transportation Policies · Environmental Impact and Sustainability