The Effect Of Carbon Emissions Limits On Supply Chain Of Remanufacturing

With the advancement of production, marketing and consumer awareness of human, low-carbon economy which becomes one of the most important direction of modern economic development has gradually been valued by government and enterprises. In the context of low-carbon economy, manufacturers need to abandon the traditional growth model since the20th century. Technological innovation and mechanism innovation of the new century should been directly applied in the process of production to achieve sustainable development of society through a low-carbon economy and lifestyle. Remanufacturing can effectively alleviate the consumption of resource and the abandonment of waste. The enormous social and economic benefits makes remanufacturing become an important option for enterprise solve the problem of low-carbon economy.This paper studies the effects of low-carbon economy on remanufacturing supply chain and the decisions of its participants. Models of two-stage supply chain of manufacturer-retailer are established. Considering two situations that new products and remanufactured products are with or not the same utility and using the theory and methods of game theory, we discuss the changes of supply chain made by carbon emissions limits. In addition, we also discuss the effect of existence of a special group called green consumers on the supply chain’s operations. We find that:(1) When there is no difference between new products and remanufactured products, if there has a high level of manufacturing emissions, the retail price and wholesale price of products are lower, the proportion of remanufactured products is higher, the profits of manufacturer and retailer is higher, and the total and average carbon emissions of enterprise is lower than the situation of non-limits of carbon emissions.(2) When there is difference between the new and remanufactured products, carbon emissions limits will increase the retail price and wholesale price of both products. And if the difference has a greater degree, the profits of both manufacturer and retailer will be higher than the profits without carbon emissions limits.(3) When there exist green consumers and the proportion is large, the higher the government limits the higher the manufacturer’s profit.(4) When the difference between the new and remanufactured products exists, government restrictions on carbon emissions can effectively control carbon emissions made by manufacturing enterprises.