Effect of Government Recycling Fund Policy and Design of Optimal Tax- Subsidy Standard in a Manufacturing- Recycling System

Yujie Jiang () and Bangyi Li ()
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Yujie Jiang: Nanjing University of Aeronautics and Astronautics, College of Economics and Management
Bangyi Li: Nanjing University of Aeronautics and Astronautics, College of Economics and Management

A chapter in Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022), 2023, pp 665-671 from Springer

Abstract: Abstract In this paper, the Stackelberg game method is used to construct a decision-making model composed of government, a single producer and a single recycler. Considering the WEEE recycling fund policy of the government, the influence of the joint mechanism of tax-subsidy on the production and recycling decisions of relevant stakeholders in the supply chain is discussed. On this basis, this paper discusses the government's optimal tax-subsidy strategy under the current policy of maximizing social welfare, and analyzes the factors that affect the formulation of the optimal tax-subsidy standard. The conclusion shows that, first of all, the tax mainly restrains the production behavior, while the subsidy mainly stimulates the recycling behavior. However, when the manufacturer uses the recycled raw materials for production, the subsidy will also increase the manufacturer's profit. Secondly, from the perspective of social welfare maximization, the optimal government tax is positively correlated with product production cost and environmental damage, while the optimal subsidy is positively correlated with product disassembly rate and recycling environmental benefits.

Keywords: WEEE; Recycling fund policy; Extended Producer Responsibility; Closed loop supply chain (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-098-5_76

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DOI: 10.2991/978-94-6463-098-5_76

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