The Carbon Subsidy Analysis in Remanufacturing Closed-Loop Supply Chain

Carbon subsidy is an important measure for the government to encourage enterprises to reduce carbon emission. This paper analyzes the impact of carbon subsidy on remanufacturing closed-loop supply chain (RCLSC). We explore the profits and the carbon emission quantities of three types of a supply chain: forward supply chain, remanufacturing closed-loop supply chain, and RCLSC with the carbon subsidy. This paper also discusses when and how the government implements the policy of carbon subsidy to encourage an enterprises’ behavior of cutting carbon emission from the view of RCLSC. We provide the close form of the conditions under which the government should implement the carbon subsidy strategy and the carbon subsidy of government could increase the profits of agents of the supply chain and deduce the carbon emission of the whole supply chain simultaneously. It is found that the government should implement the carbon subsidy strategy only when the recycling price is within a certain range, and the carbon subsidy of government should be within a reasonable range.