Carbon Quotas, Subsidies and Engineering Machinery Remanufacturing

Abstract

Engineering machinery manufacturing and remanufacturing are significant sources of greenhouse gases. In the context of emission reduction and resource recovery, the authors analyze the impact of current carbon quota allocations and government subsidies policies on manufacturers’ profits and recovery rates in a closed-loop supply chain. A simplified model consists of two manufacturers, one retailer and a third-party recycler. The study found that carbon quotas and government subsidies can both promote the improvement of recovery rates under certain conditions, and have similar effects in regulating interest distribution between manufacturers. The combination of the two methods can effectively realize the targets of recycling and carbon emissions reduction.

Keywords

competitive closed-loop supply chain / government subsidies / carbon quota allocation / remanufacturing

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RIGHTS & PERMISSIONS

The Author(s) 2016. This article is published with open access at engineering.cae.cn