Joint tax-subsidy for a manufacturing-recycling system under further extended producer responsibility

The dual constraints of resource scarcity and environmental pollution have affected sustainable socioeconomic development. However, the widely used Extended Producer Responsibility (EPR) system has paid little attention to resource conservation. Therefore, this paper proposes a different extended producer responsibility system (FEPR) to fill this gap. It includes two types of games, i.e., a Stackelberg game that a government games with manufacturers and a recycler, and a Cournot game between manufacturers in a product market. Through game analysis and data example analysis, draw the following critical management insights: an optimal joint tax-subsidy policy can maximize social welfare and incentive ecoinnovations; market competition between manufacturers can simultaneously improve market efficiency and ecological efficiency in a well-run FEPR system; resource use tax should raise in both vertical and horizontal technology overflow, environmental cost, recycling difficulty, and the number of manufacturers while the optimal subsidy rate is only positively affected by the environmental cost of waste. The research results show that our FEPR system can save resources, reduce waste pollution, and improve social welfare simultaneously. According to different implementation backgrounds, the government should adjust the joint tax subsidy mechanism for the system to achieve optimal results. (C) 2021 Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.

Automated summary

This study proposes a new Extended Producer Responsibility system (FEPR) that can simultaneously save resources, reduce waste pollution, and improve social welfare. Through game analysis and data example analysis, it is found that the optimal joint tax-subsidy policy and market competition can drive the development and efficiency of the FEPR system.