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Sustainability 2017, 9(1), 156; doi:10.3390/su9010156

Government Subsidy for Remanufacturing or Carbon Tax Rebate: Which Is Better for Firms and a Low-Carbon Economy

1
Business School, Hunan University, Changsha 410082, China
2
Academy of Mathematics and System Science, Chinese Academy of Sciences, Beijing 100190, China
3
International Business School, Shaanxi Normal University, Xi’an 710062, China
4
Department of Industrial and Manufacturing Systems Engineering, Hong Kong University, Hong Kong, China
5
College of Mangement, Xidian University, Xi’an 710126, China
*
Author to whom correspondence should be addressed.
Academic Editors: Gurkan Kumbaroglu and Marc A. Rosen
Received: 25 September 2016 / Revised: 19 December 2016 / Accepted: 17 January 2017 / Published: 22 January 2017
View Full-Text   |   Download PDF [2123 KB, uploaded 22 January 2017]   |  

Abstract

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. View Full-Text
Keywords: remanufacturing; government subsidies; trade-in; carbon regulation remanufacturing; government subsidies; trade-in; carbon regulation
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Shu, T.; Peng, Z.; Chen, S.; Wang, S.; Lai, K.K.; Yang, H. Government Subsidy for Remanufacturing or Carbon Tax Rebate: Which Is Better for Firms and a Low-Carbon Economy. Sustainability 2017, 9, 156.

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