Can carbon asset pledge financing be beneficial for carbon emission-dependent engineering machinery remanufacturing?

Shuaishuai Fu, Weida Chen and Junfei Ding

International Journal of Production Research, 2023, vol. 61, issue 19, 6533-6551

Abstract: Under the carbon trading mechanism, carbon asset has become an important resource and new production factor for enterprises, and are one of the key factors for production operations. As an emerging mortgage-loan model, carbon asset pledge financing (CAPF) can not only revitalize the carbon assets, but also address insufficient capital for enterprises. For carbon emission-dependent engineering machinery enterprises, this paper examines the impacts of CAPF on the performances of an emission-dependent and capital-constrained remanufacturer. Based on the benchmark without financing, the pure carbon asset pledge financing (PCAPF) strategy and the hybrid carbon asset pledge financing (HCAPF) strategy, are explored. The results show that: (i) Whether the remanufacturer chooses CAPF depends on initial capital, only when its initial capital is below a threshold, it can benefit from the CAPF loan. (ii) The choice of PCAPF and HCAPF for a remanufacturer depends on the quantity of carbon assets, compared with no capital constraint, the PCAPF and HCAPF are all conducive to increasing the quantity of remanufactured products and reducing carbon emissions. (iii) The HCAPF always has a higher contribution rate to the remanufactured quantity and consumer surplus than PCAPF, while the former strategy contributes less than the latter in terms of reducing carbon emission and gaining profit. (iv) Due to the relatively high interest, the HCAPF strategy can realize higher environmental performances and consumer welfare than the strategy of PCAPF.

Date: 2023
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DOI: 10.1080/00207543.2022.2131929

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