IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i12p7400-d840306.html
   My bibliography  Save this article

The Impact of Legal Recycling Constraints and Carbon Trading Mechanisms on Decision Making in Closed-Loop Supply Chain

Author

Listed:
  • Yuyan Wang

    (Business School, Shandong Normal University, Jinan 250014, China
    School of Management Science and Engineering, Shandong University of Finance and Economics, Jinan 250014, China)

  • Tingting Yu

    (Business School, Shandong Normal University, Jinan 250014, China)

  • Rui Zhou

    (Department of Industrial and Systems Engineering, The University of Tennessee, Knoxville, TN 37996, USA)

Abstract

To investigate how legal constraints on the recycling rate of used products and carbon trading mechanisms affect the profits and other decisions of supply chain system members, this paper develops and solves a two-cycle game model in which the manufacturer dominates while the retailer takes a secondary position; the manufacturer produces only non-low-carbon new products in the first cycle and both new and low-carbon remanufactured products in the second cycle. Simultaneously, the effects of parameters such as recovery rate, unit carbon trading price, and carbon emission reduction factor on the decision making of members of the supply chain system are also discussed. Finally, the conclusions are verified by numerical analysis: (1) When carbon reduction is low, the manufacturer will choose the highest recycling rate to obtain the highest profit, and when carbon reduction is high, manufacturers tend to choose not to recycle when the minimum recycling rate bound by law harms the interests of manufacturers. (2) Under the implementation of the carbon trading mechanism, the unit carbon trading price affects the profits of the members of the supply chain system depending on the size of the carbon emission reduction, and the two are negatively correlated at lower carbon emission reductions and positively correlated at higher carbon emission reductions. (3) From the perspective of supply chain system members’ interests, legal constraints and the existence of carbon trading mechanisms are not always conducive to increasing the margins of members of the supply chain system, both relevant to the size of carbon emission reductions. (4) From the perspective of environmental benefits, supply chain members do not need to pay economic costs in all cases to contribute to environmental benefits, and the existence of minimum recycling rate constraints and carbon trading mechanisms are conducive to achieving carbon reduction targets.

Suggested Citation

  • Yuyan Wang & Tingting Yu & Rui Zhou, 2022. "The Impact of Legal Recycling Constraints and Carbon Trading Mechanisms on Decision Making in Closed-Loop Supply Chain," IJERPH, MDPI, vol. 19(12), pages 1-26, June.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:12:p:7400-:d:840306
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/12/7400/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/19/12/7400/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yenipazarli, Arda, 2016. "Managing new and remanufactured products to mitigate environmental damage under emissions regulation," European Journal of Operational Research, Elsevier, vol. 249(1), pages 117-130.
    2. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
    3. Gökçe Esenduran & Eda Kemahlıoğlu-Ziya & Jayashankar M. Swaminathan, 2017. "Impact of Take-Back Regulation on the Remanufacturing Industry," Production and Operations Management, Production and Operations Management Society, vol. 26(5), pages 924-944, May.
    4. Fuan Zhang & Na Li, 2022. "The Impact of CSR on the Performance of a Dual-Channel Closed-Loop Supply Chain under Two Carbon Regulatory Policies," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    5. Gökçe Esenduran & Atalay Atasu & Luk N. Van Wassenhove, 2019. "Valuable e-waste: Implications for extended producer responsibility," IISE Transactions, Taylor & Francis Journals, vol. 51(4), pages 382-396, April.
    6. Frota Neto, João Quariguasi & Bloemhof, Jacqueline & Corbett, Charles, 2016. "Market prices of remanufactured, used and new items: Evidence from eBay," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 371-380.
    7. Ji, Jingna & Zhang, Zhiyong & Yang, Lei, 2017. "Comparisons of initial carbon allowance allocation rules in an O2O retail supply chain with the cap-and-trade regulation," International Journal of Production Economics, Elsevier, vol. 187(C), pages 68-84.
    8. S. Saha & S.P. Sarmah & Ilkyeong Moon, 2016. "Dual channel closed-loop supply chain coordination with a reward-driven remanufacturing policy," International Journal of Production Research, Taylor & Francis Journals, vol. 54(5), pages 1503-1517, March.
    9. Xu, Xiaoping & Zhang, Wei & He, Ping & Xu, Xiaoyan, 2017. "Production and pricing problems in make-to-order supply chain with cap-and-trade regulation," Omega, Elsevier, vol. 66(PB), pages 248-257.
    10. Zhang, Yue-Jun & Wang, Ao-Dong & Tan, Weiping, 2015. "The impact of China's carbon allowance allocation rules on the product prices and emission reduction behaviors of ETS-covered enterprises," Energy Policy, Elsevier, vol. 86(C), pages 176-185.
    11. Ting Ji & Xiaoping Xu & Xiaoming Yan & Yugang Yu, 2020. "The production decisions and cap setting with wholesale price and revenue sharing contracts under cap-and-trade regulation," International Journal of Production Research, Taylor & Francis Journals, vol. 58(1), pages 128-147, January.
    12. Chai, Qiangfei & Xiao, Zhongdong & Lai, Kee-hung & Zhou, Guanghui, 2018. "Can carbon cap and trade mechanism be beneficial for remanufacturing?," International Journal of Production Economics, Elsevier, vol. 203(C), pages 311-321.
    13. Karsten Neuhoff & Kim Keats Martinez & Misato Sato, 2006. "Allocation, incentives and distortions: the impact of EU ETS emissions allowance allocations to the electricity sector," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 73-91, January.
    14. Wang, Junbin & Zhang, Ting & Fan, Xiaojun, 2020. "Reverse channel design with a dominant retailer and upstream competition in emerging markets: Retailer- or manufacturer- collection?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    15. Yue Wang & Baoying Xin & Zhe Wang & Bangyi Li, 2019. "Managing Supplier-Manufacturer Closed-Loop Supply Chain Considering Product Design and Take-Back Legislation," IJERPH, MDPI, vol. 16(4), pages 1-26, February.
    16. Canan Savaskan, 2001. "Channel Choice and Coordination in a Remanufacturing Environment," Discussion Papers 1328, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    17. Wen, Wen & Zhou, P. & Zhang, Fuqiang, 2018. "Carbon emissions abatement: Emissions trading vs consumer awareness," Energy Economics, Elsevier, vol. 76(C), pages 34-47.
    18. Yang, Lei & Hu, Yijuan & Huang, Lijuan, 2020. "Collecting mode selection in a remanufacturing supply chain under cap-and-trade regulation," European Journal of Operational Research, Elsevier, vol. 287(2), pages 480-496.
    19. Chirantan Mondal & Bibhas C. Giri, 2022. "Retailers’ competition and cooperation in a closed-loop green supply chain under governmental intervention and cap-and-trade policy," Operational Research, Springer, vol. 22(2), pages 859-894, April.
    20. Diabat, Ali & Jebali, Aida, 2021. "Multi-product and multi-period closed loop supply chain network design under take-back legislation," International Journal of Production Economics, Elsevier, vol. 231(C).
    21. Zhongrui Wang & Qinghua Wu, 2021. "Carbon emission reduction and product collection decisions in the closed-loop supply chain with cap-and-trade regulation," International Journal of Production Research, Taylor & Francis Journals, vol. 59(14), pages 4359-4383, July.
    22. Hafezalkotob, Ashkan, 2017. "Competition of domestic manufacturer and foreign supplier under sustainable development objectives of government," Applied Mathematics and Computation, Elsevier, vol. 292(C), pages 294-308.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhengai Dong & Lichen Zhang & Houjian Li & Yanhui Gong & Yue Jiang & Qiumei Peng, 2022. "Knowledge Mapping and Institutional Prospects on Circular Carbon Economy Based on Scientometric Analysis," IJERPH, MDPI, vol. 19(19), pages 1-25, September.
    2. Shan Lyu & Yuyu Chen & Lei Wang, 2022. "Optimal Decisions in a Multi-Party Closed-Loop Supply Chain Considering Green Marketing and Carbon Tax Policy," IJERPH, MDPI, vol. 19(15), pages 1-23, July.
    3. Yang Lv & Xinhua Bi & Quanxi Li & Haowei Zhang, 2022. "Research on Closed-Loop Supply Chain Decision Making and Recycling Channel Selection under Carbon Allowance and Carbon Trading," Sustainability, MDPI, vol. 14(18), pages 1-17, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yang, Lei & Hu, Yijuan & Huang, Lijuan, 2020. "Collecting mode selection in a remanufacturing supply chain under cap-and-trade regulation," European Journal of Operational Research, Elsevier, vol. 287(2), pages 480-496.
    2. Cao, Kaiying & Guo, Qiang & Xu, Yuqiu, 2023. "Information sharing and carbon reduction strategies with extreme weather in the platform economy," International Journal of Production Economics, Elsevier, vol. 255(C).
    3. Ji, Jingna & Li, Tao & Yang, Lei, 2023. "Pricing and carbon reduction strategies for vertically differentiated firms under Cap-and-Trade regulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    4. Sina Abbasi & Babek Erdebilli, 2023. "Green Closed-Loop Supply Chain Networks’ Response to Various Carbon Policies during COVID-19," Sustainability, MDPI, vol. 15(4), pages 1-30, February.
    5. Chen, Yuyu & Li, Bangyi & Zhang, Guoqing & Bai, Qingguo, 2020. "Quantity and collection decisions of the remanufacturing enterprise under both the take-back and carbon emission capacity regulations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    6. Ma, Peng & Gong, Yeming & Mirchandani, Prakash, 2020. "Trade-in for remanufactured products: Pricing with double reference effects," International Journal of Production Economics, Elsevier, vol. 230(C).
    7. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    8. Cai, Jianhu & Jiang, Feiying, 2023. "Decision models of pricing and carbon emission reduction for low-carbon supply chain under cap-and-trade regulation," International Journal of Production Economics, Elsevier, vol. 264(C).
    9. Yuyu Chen & Bangyi Li & Qingguo Bai & Zhi Liu, 2018. "Decision-Making and Environmental Implications under Cap-and-Trade and Take-Back Regulations," IJERPH, MDPI, vol. 15(4), pages 1-25, April.
    10. Zhang, Zhichao & Xu, Haiyan & Chen, Kebing & Zhao, Yingxue & Liu, Zhi, 2023. "Channel mode selection for an e-platform supply chain in the presence of a secondary marketplace," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1215-1235.
    11. Xu, Xiaoping & Yan, Luling & Choi, Tsan-Ming & Cheng, T.C.E., 2023. "When Is It Wise to Use Blockchain for Platform Operations with Remanufacturing?," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1073-1090.
    12. Pazoki, Mostafa & Zaccour, Georges, 2019. "A mechanism to promote product recovery and environmental performance," European Journal of Operational Research, Elsevier, vol. 274(2), pages 601-614.
    13. Xu, Xiaoping & He, Ping & Zhou, Li & Cheng, T.C.E., 2023. "Coordination of a platform-based supply chain in the marketplace or reselling mode considering cross-channel effect and blockchain technology," European Journal of Operational Research, Elsevier, vol. 309(1), pages 170-187.
    14. Fu, Shuaishuai & Chen, Weida & Ding, Junfei & Zhang, Guoqing, 2023. "Is carbon asset pledge financing contributing to the operation of emission-dependent engineering machinery remanufacturing with emission abatement?," International Journal of Production Economics, Elsevier, vol. 266(C).
    15. Xu, Xiaoping & Yang, Yuanyuan & Zhang, Juzhi & Cheng, T.C.E., 2023. "Live streaming platform operations and coordination under the cap-and-trade regulation: Platform-enabled mode versus platform-agency mode," International Journal of Production Economics, Elsevier, vol. 260(C).
    16. Yunting Feng & Yong Geng & Ge Zhao & Mengya Li, 2022. "Carbon Emission Constraint Policy in an OEM and Outsourcing Remanufacturer Supply Chain with Consumer Preferences," IJERPH, MDPI, vol. 19(8), pages 1-16, April.
    17. Tong Shu & Qian Liu & Shou Chen & Shouyang Wang & Kin Keung Lai, 2018. "Pricing Decisions of CSR Closed-Loop Supply Chains with Carbon Emission Constraints," Sustainability, MDPI, vol. 10(12), pages 1-25, November.
    18. Xu, Xiaoping & Zhang, Mian & He, Ping, 2020. "Coordination of a supply chain with online platform considering delivery time decision," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    19. Weisheng Deng, 2019. "Does Remanufacturing Always Benefit the Manufacturer and Hurt the Supplier?," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    20. Qiao, Haike & Su, Qin, 2021. "Distribution channel and licensing strategy choice considering consumer online reviews in a closed-loop supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 151(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:19:y:2022:i:12:p:7400-:d:840306. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.