The choice of green manufacturing modes under carbon tax and carbon quota

Abstract

Green manufacturing has become an important measure for energy conservation and emission reduction. The government has issued a series of policies, including carbon taxes and quotas, to promote green manufacturing. This study identifies effective green manufacturing modes under government carbon tax and carbon quota policies, considers the automobile manufacturing industry as the research object, and constructs three green manufacturing modes: (i) Product Remanufacturing Mode (PRM), (ii) Green Product Manufacturing Mode (GPMM), and (iii) Hybrid Manufacturing Mode. The analysis reveals that (i) Contrary to common sense, when the government carbon quota is larger, the carbon emission of PRM is lower than that of GPMM. However, when the government reduces carbon allowances, the carbon emissions of PRM are higher than that of GPMM. (ii) When the R&D of remanufacturing technology is more difficult than that of green product innovation technology (without considering price competition), if the government sets a low carbon tax, companies will generate more profit by choosing PRM. Otherwise, companies will obtain more profits by choosing GPMM. However, considering price competition, if the carbon tax is low, companies will obtain more profits by choosing GPMM. Or the company will obtain more profits by choosing PRM. (iii) However, when R&D of remanufacturing technology is less difficult than that of green product innovation technology contrary conclusions of (ii) follow.