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Impact of China’s Recycling Subsidy Policy in the Product Life Cycle

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  • Xiangyun Chang

    (Department of Management Science and Engineering, East China University of Science and Technology, Shanghai 200237, China)

  • Junjie Fan

    (Department of Management Science and Engineering, East China University of Science and Technology, Shanghai 200237, China)

  • Yabing Zhao

    (Department of Decision Sciences, San Francisco State University, San Francisco, CA 94132, USA)

  • Jie Wu

    (Department of Management Science and Engineering, East China University of Science and Technology, Shanghai 200237, China)

Abstract

This paper examines the impact of the Chinese recycling subsidy policy (CRS-policy) on the recycling and reuse industry across the whole product life cycle. We propose a closed-loop dynamic system to illustrate the production flow and interactions among various industry and market factors. A simulation analysis is conducted using data on gas auto engines in China to evaluate the effectiveness of the CRS-policy in encouraging product recycling and reuse. Specifically, we analyze the preventative and regenerative effects of the CRS-policy, and its impact on environmental pollution and social welfare. We further investigate how market factors, including the manufacturer’s innovation environment, consumer environmental awareness and sensitivity to the subsidy, and recycling and reuse industry profit, affect the effectiveness of the CRS-policy. The study provides strong evidence of the important role of the subsidy policy in the recycling and reuse industry and offers insightful recommendations for enhancing the effectiveness of the subsidy policy.

Suggested Citation

  • Xiangyun Chang & Junjie Fan & Yabing Zhao & Jie Wu, 2016. "Impact of China’s Recycling Subsidy Policy in the Product Life Cycle," Sustainability, MDPI, vol. 8(8), pages 1-21, August.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:8:p:781-:d:76055
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    References listed on IDEAS

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    Cited by:

    1. Majid Ghorbani & Liyan Xuan, 2018. "Challenging Ingrained Thoughts? The Joint Effect of Stereotypes and Awareness of Related Information on Pro-Environmental Behavior in China," Sustainability, MDPI, vol. 10(6), pages 1-20, June.
    2. Huihui Liu & Xiaolin Wu & Desheng Dou & Xu Tang & G. Keong Leong, 2018. "Determining Recycling Fees and Subsidies in China’s WEEE Disposal Fund with Formal and Informal Sectors," Sustainability, MDPI, vol. 10(9), pages 1-14, August.
    3. Bomi Song & Donghyun Choi, 2018. "Dynamic Capability of the Firm as Driver of Green Supply Chain Management Implementation," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    4. Zhang, Yunrong & Hong, Zhaofu & Chen, Zhixiang & Glock, Christoph H., 2020. "Tax or subsidy? Design and selection of regulatory policies for remanufacturing," European Journal of Operational Research, Elsevier, vol. 287(3), pages 885-900.

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