Effects of green consumption voucher policy on carbon emission reduction within a remanufacturing outsourcing supply chain: new insights from the trade-offs between costs and benefits

In response to the call for a green recovery of the economy, the Chinese government has developed a policy to issue green consumption vouchers (GCV) specifically aimed at encouraging the purchase of low-carbon products. This policy adopts a proportional distribution method to incentivize the public to buy low-carbon and environmentally friendly goods, promoting sustainable practices through marketing mechanisms. Due to the GCV policy’s emphasis on low-carbon initiatives, original equipment manufacturers (OEMs) that produce energy-intensive products are not fully eligible for the policy’s incentives. As a result, the implementation of the GCV policy will require businesses to recalibrate their carbon emission reduction (CER) strategies, weighing the costs of technological upgrades against the benefits of policy incentives. This paper explores the impact of the GCV policy on achieving both economic and ecological efficiency, with a focus on the outsourcing remanufacturing model. It draws on policy practices in countries that have implemented GCV policies. The study reveals the following findings: (1) The GCV policy can significantly enhance the profit margins of manufacturers. With the support of policy subsidies, OEMs are likely to pursue advancements in CER technologies. However, it is important to recognize that excessively generous GCV subsidies could reinforce the market dominance of OEMs, potentially hindering the remanufacturing efforts of outsourcing remanufacturers (ORs). (2) An unintended policy effect is observed. Although the GCV policy encourages OEMs to upgrade their CER technologies and lower unit carbon emissions, the increase in overall production can lead to a decline in overall environmental efficiency. (3) A single cost-sharing contract does not improve ORs’ profits, resulting in little to no interest in participating in such agreements. In contrast, a two-part tariff system combined with a cost-sharing contract can effectively address this concern and lead to a Pareto improvement within the supply chain (SC).