Carbon Taxation and Regional Cost-Burden Balancing in a Household Plastic-Waste Closed-Loop Supply Chain: An Exact Bilevel Optimization Model

Carbon pricing can change manufacturers’ material choices, while the costs of managing the residual waste remain geographically uneven. We formulate a manufacturer–regulator bilevel model for a household plastic-waste closed-loop supply chain with quantity-dependent recycled-bale prices, activity-specific carbon accounts, physical interregional waste routing, and a proportional regional cost-burden standard. The lower level is explicitly a single coordinating-regulator linear program rather than a game among independent regions. Its primal constraints, dual constraints, and strong-duality equality are embedded in the manufacturer problem; binary-continuous products are exactly linearized using the manufacturer’s SOS1 price-grid variables. Thus, every reported policy point is obtained from the same 12-region mixed-integer equilibrium formulation. Across 36 central policy combinations, HiGHS reports a zero mixed-integer programming gap, and the largest feasibility and optimality residual is 5.24 × 10−8. Raising the carbon tax from 0 to 10 USD/tCO2 increases the real recycling rate (RRR) from 15.33% to the bale-capacity limit of 29.85% and reduces physical emissions by 11.64%. Tightening the allowed regional burden deviation from 25% to 5% reduces the standard deviation of normalized residual-waste cost burden by 77.89% and interregional residual-waste transfers by 77.05%, but does not change the RRR. This zero-recycling effect overturns the earlier assumption-driven result: a pure routing-based cost-balancing rule cannot mechanically stimulate the manufacturer’s recycled-input demand. A global analysis of 300 parameter sets and five independent regional samples re-solves 1800 equilibrium models; all have a zero solver gap and pass the residual audit. Carbon-induced RRR increases have a median of 17.03 percentage points, while strict-versus-loose burden-threshold changes in RRR are zero in every set. The results distinguish carbon efficiency, regional cost incidence, and fiscal incidence and show that policy complementarity must be demonstrated through endogenous decision links rather than imposed response functions.