Research on Emission Reduction Subsidy Strategies for Supply Chain Recycling Based on Carbon Taxes

This paper constructs a recycling and emission reduction model in which the third party is responsible for recycling and the manufacturer is responsible for remanufacturing, and conducts a comparative analysis of the three scenarios of no government subsidies, government subsidies for the recycler's unit of recycling and the manufacturer's unit of emission reduction, respectively. The results show that carbon tax can reduce carbon emissions of enterprises, but it raises product prices and reduces market demand. On the other hand, government subsidies can increase product recycling, carbon emission reduction, corporate profits, and government benefits. Both subsidy mechanisms have the same effect on product recycling, i.e., they provide the same recycling price, quantity, and carbon emission reduction. In addition, both subsidy mechanisms have the same effect on corporate profits and government benefits. Manufacturers share government subsidy benefits with recyclers through recycling transfer prices. The strength of the government subsidy is proportional to the basic recycling volume of old products and inversely proportional to the unit recycling and carbon tax. When the government reduces the recycler's recycling volume, the strength of the subsidy is proportional to the carbon emission reductions per unit of old product remanufacturing. When subsidizing manufacturers to reduce emissions, the strength of the subsidy needs to be considered from the perspective of the carbon emission reduction of the remanufactured product unit and the unit cost savings.