Abstract
Due to rapid economic development and population growth, environmental pollution problems such as urban pollution and depletion of natural resources have become increasingly prominent. Municipal solid waste is part of these problems. However, waste is actually an improperly placed resource. As a part of green supply chain management, remanufacturing can turn waste products into remanufactured products for resale. Based on the development status of China’s remanufacturing industry, this paper establishes three Stackelberg game models, namely the free recycling model (model N), the government regulation model based on the reward–penalty mechanism (model G), and the government dual-intervention model (model GF). In this study, the standard solution method for the Stackelberg game method, namely the backward induction method, is applied to solve the dynamic game equilibrium. For comparison, a further numerical analysis is also carried. The research results show that: (1) in the closed-loop supply chain based on remanufacturing, the strengthening of cooperation between manufacturers and remanufacturers is beneficial in terms of maximizing supply chain profits; (2) in order to maximize social benefits, the government needs to intervene in green supply chain management; (3) government regulation is particularly important when the remanufacturing industry is in the initial stage of development; (4) government intervention needs to be based on the development level of the remanufacturing industry; (5) in order to maximize social benefits, it is recommended that the government consider the ratio between the green consumption subsidies and the taxes on new products.
Highlights
Due to rapid economic development and population growth, environmental pollution problems such as urban pollution and depletion of natural resources have become increasingly prominent.Municipal solid waste is a byproduct of these issues, with data showing that globally each person generated 1.2 kg of municipal solid waste per day in 2016. [1]
Proposition 8 shows that when the remanufacturing industry is in the development period, under the dual regulations, as the government increases the benchmark recycling rate, the manufacturers adopt a lower level of recycling effort and the remanufacturers increase their proportion of outsourcing, so the number of remanufactured products produced by the manufacturers is reduced
When the manufacturers do not fully recycle, the government will sacrifice its profits in order to maximize the total social welfare benefits; when the manufacturers fully recycle, the government will maintain its own profit margins; When the remanufacturing industry is at the early stage of development, there is no significant difference in the manufacturers’ profits between model G and model GF, the total supply chain profits under the model G are significantly higher than the total supply chain profits under model GF
Summary
Due to rapid economic development and population growth, environmental pollution problems such as urban pollution and depletion of natural resources have become increasingly prominent. Data from the World Bank show that China, as the most populous country in the world, surpassed the United States to produce the largest volume of global municipal solid waste in 2004 [14] To tackle this serious problem and its deteriorating effects on the environment, the Chinese government introduced a variety of EPR policies in the home appliance market during 2009–2012. Based on the development of China’s remanufacturing industry, a practical context has arisen, whereby manufacturers outsource part of their remanufacturing business to remanufacturers; Many existing studies take the ratio between a government’s green subsidies for remanufactured products and green taxes on new products as exogenous variables This article regards this ratio as an endogenous variable, which helps to provide the government with more practical legal policies. The analysis of the calculation examples in this study strongly proves that the government should consider the optimal ratio between government subsidies and tax policies
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