Effects of government subsidies on production and emissions reduction decisions under carbon tax regulation and consumer low‐carbon awareness

To promote low-carbon production, the government simultaneously provides some subsidies under carbon tax regulations. Two government subsidies are widely adopted: one is based on emissions reduction quantity and the other is based on emissions reduction investment cost. Additionally, consumer low-carbon awareness has also been enhanced. Considering the aforementioned circumstances, this paper investigates the effects of different government subsidies on production and emissions reduction decisions under a carbon tax regulation by formulating three decision-making optimization models. The results show that (1) although the carbon tax regulation cannot guarantee further improvement of emissions reduction levels, government subsidies could make the corresponding conditions of improving emissions reduction investments wider; (2) a heavy carbon tax or stronger consumer low-carbon awareness would make the positive effect of government subsidies more apparent; and (3) subsidy policies may also be selected by the government from different perspectives, such as manufacturer development, consumer surplus, environmental damage and social welfare. Especially, from the perspective of maximizing social welfare, investment cost (IC) subsidy is not always advantageous, while emissions reduction (ER) subsidy can always bring higher social welfare compared with the case under no government subsidy

An Optimization Approach for the Coordinated Low-Carbon Design of Product Family and Remanufactured Products

[EN] With increasingly stringent environmental regulations on emission standards, enterprises and investigators are looking for effective ways to decrease GHG emission from products. As an important method for reducing GHG emission of products, low-carbon product family design has attracted more and more attention. Existing research, related to low-carbon product family design, did not take into account remanufactured products. Nowadays, it is popular to launch remanufactured products for environmental benefit and meeting customer needs. On the one hand, the design of remanufactured products is influenced by product family design. On the other hand, the launch of remanufactured products may cannibalize the sale of new products. Thus, the design of remanufactured products should be considered together with the product family design for obtaining the maximum profit and reducing the GHG emission as soon as possible. The purpose of this paper is to present an optimization model to concurrently determine product family design, remanufactured products planning and remanufacturing parameters selection with consideration of the customer preference, the total profit of a company and the total GHG emission from production. A genetic algorithm is applied to solve the optimization problem. The proposed method can help decision-makers to simultaneously determine the design of a product family and remanufactured products with a better trade-off between profit and environmental impact. Finally, a case study is performed to demonstrate the effectiveness of the presented approach.This research was funded by National Natural Science Foundation of China (grant number 51575264 and 51805253); the Fundamental Research Funds for the Central Universities (grant number NP2017105); Jiangsu Planned Projects for Postdoctoral Research Funds (grant number 2018K017C); and the Qin Lan Project.Wang, Q.; Tang, D.; Li, S.; Yang, J.; Salido, MA.; Giret Boggino, AS.; Zhu, H. (2019). An Optimization Approach for the Coordinated Low-Carbon Design of Product Family and Remanufactured Products. Sustainability. 11(2):1-22. https://doi.org/10.3390/su11020460S122112Mascle, C., & Zhao, H. P. (2008). Integrating environmental consciousness in product/process development based on life-cycle thinking. International Journal of Production Economics, 112(1), 5-17. doi:10.1016/j.ijpe.2006.08.016Kengpol, A., & Boonkanit, P. (2011). 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Flexible versus simple trade-in strategy for remanufacturing

Some enterprises recently start to offer the flexible trade-in option to attract customers from competitors, in contrast to the simple one that only allows them to return used products to the same manufacturers for new. Based on analytical and numerical analyses, this study compares the environmental impacts of two trade-in strategies (simple versus flexible) in combination with different carbon tax policies. From the perspective of consumer switching behaviour, a Hotelling model with two market segments is established. Under the flexible trade-in strategy, the carbon emission of enterprises turns out to be significantly higher than that under the simple trade-in strategy. An appropriate carbon tax policy, especially with preferential tax rates on green products, is capable of guiding enterprises to choose a more environment-friendly trade-in strategy included in the model. The findings fill the research gap in comparing the pros and cons of simple and flexible trade-in strategies in terms of sustainable development, and provide managers and policy-makers the insights on how to promote the healthy development of the remanufacturing industry with trade-in strategizing and carbon taxation

Remanufacturing Process Planning Considering Quality Uncertainties, Environmental Taxes and Incentives

As environmental issues are gradually being valued by governments and societies, companies have begun to engage in economic sustainable practices such as remanufacturing, reuse and recycling, among other socially responsible practices. The broader impact of these practices enables companies to archive the goal of circular economies. Under normal circumstances, consumers’ used products have often been released into landfills, resulting in environmental pollution. This is especially so for electronic products since most materials used in their production are non-biodegradable. This research addresses the practice of remanufacturing. The remanufacturing value of the products gradually declines with the usage--also referred to as the product resident time. So the remanufacturer must decide when to acquire these end of life products from customers, to carry out remanufacturing at maximum benefits. Companies face logistical challenges in the remanufacturing process, including uncertainties in the quality and quantity of returned products, and uncertainties in the process variables including process times and resource availability. In order to maximize expected profits, we provide a decision model for finding the optimal quality threshold to accept into the system and also show the variability in the profit percentages when products are returned at various stages in their life cycle. The model also considers a system that not only remanufactures products but also salvages components and uses them in the remanufacturing process. The model also allows for purchases of new components from suppliers as needed. The model also includes environmental factors such as emissions taxes and remanufacturing government incentives. The model is applied to a case study of a real control drive remanufacturing process, with two types of products that have interchangeable key components. The results confirm that the quality threshold is indeed of significance in the process. The demand forecast for remanufactured products in the secondary market is even more significant, driving the acceptable threshold quality to as low as 0.25 on a scale of 0 (worst quality) to 1 (best quality). Lastly, the results show that the resident time (time of return after the product was first sold in the first market) also significantly impacts the profit

The design of green supply chains under carbon policies: A literature review of quantitative models

Carbon footprinting of products and services is getting increasing attention due to the growing emphasis on carbon related policies in many countries. As a result, many enterprises are focusing on the design of green supply chains (GSCs) with research on supply chains (SCs) focused not only on cost efficiency, but also on its environmental consequences. The review presented in this paper focuses on the implications of carbon policies on SCs. The concept of content analysis is used to retrieve and analyze the information regarding drivers (carbon policies), actors (for example, manufacturers and retailers), methodologies (mathematical modeling techniques), decision-making contexts (such as, facility location and order quantity), and emission reduction opportunities. The review shows a lack of emissions analysis of SCs that face carbon policies in different countries. The research also focuses on the design of carbon policies for emissions reduction in different operating situations. Some possible research directions are also discussed at the end of this review.A NPRP award NPRP No.5-1284-5-198 from the Qatar National Research Fund (a member of The Qatar Foundation).Scopu

OPTIMAL INBOUND/OUTBOUND PRICING MODEL FOR REMANUFACTURING IN A CLOSED-LOOP SUPPLY CHAIN

The paper presents a model for optimizing inbound and outbound pricing for closed-loop supply chains that remanufacture reusable products. Remanufacturers create reusable products from returned used products and sell the products “as new” to manufacturers or consumers. By implementing a return subsidy, remanufacturers can encourage the consumer to return used products. Demand for the as-new components often depends on the selling price and inventory. The available inventory increases as the subsidy increases and as the price decreases. Our model can determine the optimal subsidy and selling price for used and remanufactured products, respectively. Our model uses the Karush–Kuhn–Tucker conditions to solve its nonlinear problem. Sensitivity analysis reveals how different parameters affect profit under model-optimized conditions

The case for transforming the approach to waste, and growing a circular economy; a design perspective.

In recent years, there has been a growing discussion of resource efficiency, the ‘circular economy’ and the economic and environmental benefits of maximising the value of resources beyond the life of a product. This Environmental Audit Committee inquiry was initiated to examine the case for transforming the approach to waste, and growing a 'circular economy'. This is an evidence paper published online at http://www.publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21411.htm A full transcript of the inquiry is available at http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/environmental-audit-committee/growing-a-circular-economy/oral/9635.html

Multi-Periodic Distributional-Robust Stackelberg Game with Price-History-Dependent Demand and Environmental Corrective Actions

The paper investigates a multi-period supply channel facing uncertain and price-history dependent demands and environmental regulations. The knowledge about the demands is limited to its mean and standard deviation in each period, .e., there is incomplete information on the actual distribution. A distributional robust approach is conducted to address incompleteness. The chain is incorporating environmental policies such as pollution constraints and (optimal) corrective taxes. A single contract covers all periods. Numerical examples highlight the benefits of a single contract