Journal
SUSTAINABILITY
Volume 9, Issue 1, Pages -Publisher
MDPI
DOI: 10.3390/su9010156
Keywords
remanufacturing; government subsidies; trade-in; carbon regulation
Funding
- National Natural Science Foundation of China [71172194, 71521061, 71390330, 71390331, 71390335, 71571065, 71572055]
- Program for New Century Excellent Talents in University [NCET-13-0193]
- Ministry of Education in China of Humanities and Social Science Project [14YJA630077]
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The government as a policy maker wishing to promote remanufacturing and proper disposal of hazardous old products which are harmful to environment has taken many actions, ranging from carbon regulation and financial incentives such as trade-in subsidy. However, carbon tax can result in loss of profit for firms to some degree, so the government has to give other subsidy to balance the profits and carbon emission. Thus, this article investigates two subsidy mechanisms: remanufacturing subsidy or tax rebate. The optimal pricing and production decision under these policies are examined. Our results show that carbon tax has a great impact on pricing strategies. Trade-in subsidy can encourage customers to replace their existing products with new and remanufactured products. Both remanufacture subsidy and tax rebate are beneficial to manufacturer and can further promote remanufacturing development.
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