The Impact of Carbon Trade on Outsourcing Remanufacturing

Xiqiang Xia, Mengya Li, Biao Li and Hao Wang
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Xiqiang Xia: School of Business, Zhengzhou University, Zhengzhou 450001, China
Mengya Li: School of Business, Zhengzhou University, Zhengzhou 450001, China
Biao Li: School of Business, Zhengzhou University, Zhengzhou 450001, China
Hao Wang: Department of Geography and Planning, University of Toronto, Toronto, ON M5S 2E8, Canada

IJERPH, 2021, vol. 18, issue 20, 1-18

Abstract: Outsourcing remanufacturing is an important way to achieve resource recycling, green manufacturing and carbon neutrality goals. To analyze the impact of carbon trade on manufacturing/remanufacturing under outsourcing remanufacturing, this article builds a game model between an original equipment manufacturer (OEM) and a remanufacturer under the carbon trade policy. In the outsourcing remanufacturing model, this article compares the impact of the carbon trade policy on the unit retail price, sales volume, revenue, environmental impact, and consumer surplus of new and remanufactured products. The research mainly draws the following conclusions: (1) Carbon trade increases the prices of both new and remanufactured products and the cost of outsourcing. Only when certain conditions are met can increased carbon trade prices increase revenue. (2) The carbon trade policy helps reduce the adverse impact on the environment, but only when the carbon trade price is greater than a certain threshold can it increase consumer surplus. (3) Consumer preferences and carbon emissions of the unit product affect manufacturers’ profits. Increased consumer preference for remanufactured products and reduced carbon emissions of remanufactured products contribute to increased sales and revenues.

Keywords: carbon trade; outsourcing remanufacturing; game model (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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