Designing an incentive scheme for producer responsibility organization of waste tires: A MCGP cooperative game approach

Abstract

Extended producer responsibility (EPR) of waste tires is usually implemented by a producer responsibility organizations (PRO) composed of a group of tire producers. As a collective EPR system, the main goals of PRO are to achieve recycling cost efficiency as well as offer incentives for all member producers to design their products for recyclability (or called eco-design). Nevertheless, current PROs for tire recycling are far from their goals and do not provide sufficient incentives because they ignore the differentiated recyclability of products from different producers and charge producers a uniform unit fee. To resolve these problems, we first create a mixed recovery decision model for tire recycling of PROs based on multi-choice goal programming (MCGP) approach towards system optimality and obtain the optimal total recovery cost. In particular, the proposed MCGP model allows for integrating a variety of different regulations under a carbon-policy regime into a single programming model through the formulated utility functions and penalty functions. This makes it easy to adjust the regulatory intensity to compromise the conflicting objectives regarding cost efficiency and carbon emission reduction. Further, recognizing the optimal total recovery cost as a baseline, a cost-sharing scheme is proposed to maintain the voluntary participation of producers for PRO as well as offer eco-design incentives for producers. This study proves that the solutions of the proposed hybrid method is more suitable for the research problem than the eminent solutions such as the Shapley value. The feasibility of the proposed hybrid model is examined via a numerical study with calibrated real-world datasets.