Decision-Making and Environmental Implications under Cap-and-Trade and Take-Back Regulations

Yuyu Chen, Bangyi Li, Qingguo Bai and Zhi Liu
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Yuyu Chen: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, China
Bangyi Li: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, China
Qingguo Bai: Institute of Operations Research, School of Management, Qufu Normal University, Rizhao 276826, China
Zhi Liu: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, China

IJERPH, 2018, vol. 15, issue 4, 1-25

Abstract: To reduce carbon emissions during production and realize the recycling of resources, the government has promulgated carbon cap-and-trade regulation and take-back regulation separately. This paper firstly analyses the manufacturing, remanufacturing and collection decisions of a monopoly manufacturer under cap-and-trade regulation and take-back regulation conditions, and then explores the environmental impact (i.e., carbon emissions) of both carbon regulation and more stringent take-back regulation. Finally, numerical examples are provided to illustrate the theoretical results. The results indicate that it will do good for the environment once the cap-and-trade regulation is carried out. We also conclude that government’s supervision of carbon trading price plays an important role in reducing the environmental impact. Furthermore, unexpectedly, we prove that if emissions intensity of a remanufactured (vis-á-vis new) product is sufficiently high, the improvement of collection and remanufacturing targets might lead to the deterioration of environment.

Keywords: production and collection decision; remanufacturing; cap-and-trade regulation; take-back regulation; environmental implication (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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