Research on the Impact of Government Carbon Quota and Subsidy Policies on Manufacturers’ Production Decisions Based on Baseline Method

In response to escalating global warming and climate change concerns, governments are encouraging manufacturers to take responsibility for the entire life cycle of products through policies and subsidies. This approach aligns with the dynamic carbon trading market to deter the production of new products and to promote the manufacture of remanufactured products. This paper presents a closedloop supply chain model involving manufacturers, recyclers, and markets. It is observed that as unit carbon emission prices rise, the unit cost of producing new products for manufacturers also increases, leading to a reduction in optimal output and profit margins for new products. Consequently, manufacturers are inclined to adjust their production decision, increasing the optimal output of remanufactured products, conserving carbon emission allowances, and reducing production costs to enhance profitability.