Effects of carbon permits allocation methods on remanufacturing production decisions

Chang, Xiangyun; Li, Yinping; Zhao, Yabing; Liu, Wenjie; Wu, Jie

doi:10.1016/j.jclepro.2017.02.175

Cited by 79 publications

(33 citation statements)

References 32 publications

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“…However, it is observed in practice that the remanufactured products are often offered at a lower price because of possible downgrading [20][21][22], and the consumer cognitive deficiency (namely, higher perceived value of original manufactured products) [23,24]. Examples of such products include personal computers, photocopiers, automotive engines and tires [1,25].…”

Section: Literature Reviewmentioning

confidence: 99%

Production Decisions of Manufacturing and Remanufacturing Hybrid System Considering Downward Substitution: A Comprehensive Model Integrating Financial Operations

Wang

Fei

2020

IEEE Access

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Traditional approaches for production decisions of the manufacturing/remanufacturing hybrid system usually focus on physical operations and ignore the corresponding financial aspects. This paper proposes a mixed integer stochastic programming model integrating physical and financial operations based on scenario analysis, which considers the downward substitution between new and remanufactured products and selects financial performance indicator, i.e. economic value added, as the optimal objective function. The prime superiorities of the integrated approach are emphasized through a numerical example, and sensitivity analyses on some critical parameters are conducted. The findings indicate that the integrated approach can not only ensure the stability of hybrid production system, but also significantly improve financial operation efficient and reduce total financial operation cost, and thus eventually brings the manufacturer higher objective value. Furthermore, the advantage of integrated approach in objective optimization is more prominent when manufacturers intend to provide higher service level to customers. Finally, the results proposed in this paper provide applicable suggestions to manufacturers and financial institutions. INDEX TERMS Production decisions, manufacturing /remanufacturing hybrid system, downward substitution, financial operations, economic value added YONGJIAN WANG was born in Henan, China, in 1989. He received the B.S. degree in financial management from Henan Polytechnic University in 2011, the M.S. degree in business management from Nanjing University of Finance & Economics in 2013, and the PhD degree in management science and engineering from Southeast University in 2017. Since 2017, he has been a lecturer in the Business School at Jiangsu Normal University. His research interests are in production and operations management, supply chain management, financial management, and systems simulation modeling and optimization.

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Section: Literature Reviewmentioning

confidence: 99%

Production Decisions of Manufacturing and Remanufacturing Hybrid System Considering Downward Substitution: A Comprehensive Model Integrating Financial Operations

Wang

Fei

2020

IEEE Access

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“…Zhang et al (2015b) discuss how the carbon allowance allocation mechanisms influence the firms’ emission abatement behavior based on a multi-stage profit model. Chang et al (2017) explore the effect of carbon permits allocation rules on manufacturer’s remanufacturing decision in two stages. So far, few studies have discussed the effect of carbon allowance allocation rules on emission abatement decisions from a microscopic perspective.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of carbon permit allocation rules on incentive contracts for carbon emission reduction

Xiao

Qiu

et al. 2018

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Purpose The purpose of this paper is to examine the impact of carbon permit allocation rules (grandfathering mechanism and benchmarking mechanism) on incentive contracts provided by the retailer to encourage the manufacturer to invest more in reducing carbon emissions. Design/methodology/approach The authors consider a two-echelon supply chain in which the retailer offers three contracts (wholesale price contract, cost-sharing contract and revenue-sharing contract) to the manufacturer. Based on the two carbon permit allocation rules, i.e. grandfathering mechanism and benchmarking mechanism, six scenarios are examined. The optimal price and carbon emission reduction decisions and members’ equilibrium profits under six scenarios are analyzed and compared. Findings The results suggest that the revenue-sharing contract can more effectively stimulate the manufacturer to reduce carbon emissions compared to the cost-sharing contract. The cost-sharing contract can help to achieve the highest environmental performance, whereas the implementation of revenue-sharing contract can attain the highest social welfare. The benchmarking mechanism is more effective for the government to prompt the manufacturer to produce low-carbon products than the grandfathering mechanism. Although a loose carbon policy can expand the total emissions, it can improve the social welfare. Practical implications These results can provide operational insights for the retailer in how to use incentive contract to encourage the manufacturer to curb carbon emissions and offer managerial insights for the government to make policy decisions on carbon permit allocation rules. Originality/value This paper contributes to the literature regarding to firm’s carbon emissions reduction decisions under cap-and-trade policy and highlights the importance of carbon permit allocation methods in curbing carbon emissions.

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“…Among these, direct encouragement policies mainly include government subsidies [24,25] and return policies [26,27]. Negative restrictive policies mainly include carbon taxes [28], carbon regulation [20], cap-and-trade schemes [29], and carbon permit allocation [30].…”

Section: Introductionmentioning

confidence: 99%

“…The effective formulation and implementation of carbon tax rates can reduce carbon emissions in the remanufacturing supply chain [44,45]. Carbon tax policies are more conducive to carbon reduction than direct carbon control policies [30]. Due to the different characteristics of different remanufacturing companies, the government should set carbon tax rates based on the tax collection cycles and carbon tax effects to more effectively reduce carbon emissions [46].…”

Section: Introductionmentioning

confidence: 99%

Comparatively Analyzing the Impact of Government Subsidy and Carbon Tax Policy on Authorized Remanufacturing

Geng

Xia

et al. 2021

IJERPH

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Authorized remanufacturing is an important means to achieve green manufacturing and carbon neutrality. In this study, a game theory model between a manufacturer and a remanufacturer was constructed to analyze the impact of government subsidies and carbon tax policies on authorized remanufacturing. Based on the game theory model, the effects of two government policies on the optimal solution, namely, the unit cost of remanufacturing product authorization and the waste product recovery rate, were compared and analyzed. This analysis could provide a reference for the government to improve and formulate relevant remanufacturing policies. The main results are as follows: government subsidy policies may increase the unit cost of remanufacturing product authorization and the rates of waste product recovery; government carbon tax policies may not affect the unit cost of remanufacturing product authorization, and increase the rates of waste product recovery; the government subsidy policy may not affect the unit retail price of new products, and reduces the unit retail price of remanufactured products; the government subsidy and carbon tax policies may reduce sales of new products and increase sales of remanufactured products; the government subsidies may increase the revenue of the original equipment manufacturer (OEM) and the remanufacturer; and the government carbon tax policies may increase the revenue of the remanufacturer. However, government carbon tax policies increase the revenue of the OEM only when the new product carbon tax amount is higher than a certain threshold. The impact of the two policies on the environment is related to the ratio of the two products’ impact on the environment, i.e., the quota ratio between the unit government carbon tax of the new product and the unit government subsidy of the remanufactured product. Finally, the consumer surplus is maximized when the government adopts the subsidy policy and lowest when the government adopts the carbon tax policy.

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Effects of carbon permits allocation methods on remanufacturing production decisions

Cited by 79 publications

References 32 publications

Production Decisions of Manufacturing and Remanufacturing Hybrid System Considering Downward Substitution: A Comprehensive Model Integrating Financial Operations

Production Decisions of Manufacturing and Remanufacturing Hybrid System Considering Downward Substitution: A Comprehensive Model Integrating Financial Operations

Impact of carbon permit allocation rules on incentive contracts for carbon emission reduction

Comparatively Analyzing the Impact of Government Subsidy and Carbon Tax Policy on Authorized Remanufacturing

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