Double third-party recycling closed-loop supply chain decision under the perspective of carbon trading

Abstract

How to maximize the economic and environmental benefits of low-carbon behavior in enterprises deserves our attention and further discussion. Due to the uncertainties on the market of low-carbon production and waste production, we study a recycling and remanufacturing closed-loop supply chain consisting of one manufacturer, one retailer and two competing third-party recyclers with risk-aversion characteristics, and use the Stackelberg games to find equilibrium decisions of supply chain and its members. More importantly, we study the changes in expected utility of supply chain and its members brought by changes in four possibilities (carbon emission trading price, consumers’ low-carbon awareness, carbon emission and competition of third-party recyclers) in three emission reduction models. The results show that, firstly, carbon emission trading price, consumers’ low-carbon awareness and carbon emission are negatively correlated with the expected utility of manufacturer and retailer. Then, the third-party recyclers’ competition degree is negatively correlated with the expected utility of manufacturer and third-party recyclers. Moreover, revenue-sharing and cost-sharing contracts have little impact on manufacturer’ low-carbon production.