Jian Cao

Motivated by the imperative of industrial decarbonization, this study investigates how different regulatory frameworks—Carbon Cap, Carbon Tax, and Cap‐and‐Trade—impact a manufacturer's carbon abatement investment and supply chain coordination. Distinct from prior literature assuming frictionless markets, we explicitly model the “bid‐ask spread” in permit trading and introduce endogenous contract negotiation to resolve vertical investment inefficiencies. Our analysis yields five critical findings. First, under cap‐and‐trade policies with asymmetric trading prices and moderate quotas, the manufacturer optimally exhausts its allocated permits without engaging in trading, effectively treating the policy as a rigid cap. Second, we identify a unique optimal abatement level that maximizes manufacturer profit; notably, the retailer derives no incremental benefit from increases in the manufacturer's permit allocation. Third, contrary to standard intuition, we demonstrate that in markets with environmentally conscious consumers, increasing regulatory stringency can inadvertently suppress the manufacturer's emission reduction efforts. Fourth, comparing instruments reveals that cap‐and‐trade policies induce higher abatement levels than carbon taxes when both tax rates and assigned quotas are at their respective extremes (either very low or very high). Finally, regarding coordination, we show that perfect supply chain coordination is achievable under specific regulatory conditions if the manufacturer commits to an emission reduction level prior to negotiating order quantities and wholesale prices. These findings highlight the critical role of market frictions and bargaining power in designing effective carbon policies and operational strategies.

Within closed-loop supply chains (CLSCs), limited attention has been given to firms’ production and abatement decisions involving carbon permit transfer between an original equipment manufacturer (OEM) and an independent remanufacturer (IR) under a cap-and-trade policy (CTP). Several questions remain unresolved: How does CTP reshape production and abatement decisions through carbon permit transfer under binding emission constraints? Can such regulation reallocate abatement responsibilities between firms and generate environmental and economic benefits? To address these questions, this paper develops a constrained Cournot game model capturing competitive interactions between an OEM and an IR under regulation. The results show that CTP reallocates abatement responsibilities toward the firm with a lower abatement difficulty, inducing full abatement as a corner solution. When remanufactured products exhibit a high low-carbon level, a moderate increase in cap stringency promotes remanufacturing output and market share. By contrast, once full abatement is reached, stricter regulation expands output. Moreover, when remanufacturing features substantial cost savings and a high low-carbon level, CTP consistently improves social welfare. This study provides insights into how cap-and-trade policies shape production and abatement decisions in CLSCs.

This study introduces a novel tripartite evolutionary game model to analyze the strategic interactions among electric vehicle (EV) aggregators, local governments, and EV users in vehicle–grid interaction (VGI) markets. The core novelty lies in capturing bounded rationality and dynamic decision-making across the three stakeholders, revealing how policy incentives and market mechanisms drive the transition from disordered charging to bidirectional VGI. Key findings include the following: (1) The system exhibits five stable equilibrium points, corresponding to three distinct developmental phases of the VGI market: disordered charging (V0G), unidirectional VGI (V1G), and bidirectional VGI (V2G). (2) Peak–valley price differences are the primary driver for transitioning from V0G to V1G. (3) EV aggregators’ willingness to adopt V2G is influenced by upgrade costs, while local governments’ subsidy strategies depend on peak-shaving benefits and regulatory costs. (4) Increasing the subsidy differential between V1G and V2G accelerates market evolution toward V2G. The framework offers actionable policy insights for sustainable VGI development, while advancing evolutionary game theory applications in energy systems.

Remanufacturing is a sustainable product reutilization strategy to realize responsible consumption and production. However, remanufacturing practice can be subject to deficient consumer perception, production capacity constraint, uncertain demand and government intervention. This paper considers outsourced remanufacturing mode to establish and investigate a remanufacturing supply chain (RSC) network consisting of multiple manufacturers, retailers and remanufacturers. Optimality conditions with RSC network members are derived utilizing variation inequality. Numerical examples based on data accumulated from a remanufacturing enterprise and questionnaire survey on consumer perception for remanufactured products, are presented to put the proposed model into practice. Influences of product heterogeneity (new and remanufactured products), consumer preference, production capacity constraint, product price competitiveness, market demand fluctuation, and government financial measures on RSC network production and pricing strategies are investigated through numerical analyses. Analytical results indicate that pricing for the remanufactured product would be equivalent to that of the new product when consumers value the remanufactured product at a relatively high level, however an excessive penchant for the remanufactured product is less profitable especially from the perspective of the remanufacturer. In general, an upper-middle level of consumer preference for the remanufactured product is the most favourable scenario. When remanufacturing industry is just emerging, a high tax will be imposed on the manufacturer to accumulate remanufacturing subsidy for the government to achieve its balanced budget. As the remanufacturing industry develops and consumer environmental awareness enhances, it is especially essential for the government to establish a levy-subsidy mechanism to maintain sustainable progress of the industry. Combining main conclusions with the background of Chinese remanufacturing industry, managerial implications are provided from respective perspectives of enterprises’ remanufacturing operation, government financial regulation, and consumer awareness enhancement. The analyses and results are especially relevant as a reference for remanufacturing decision-makings as well as government financial regulations, thus enhancing production sustainability as well as environmental benefits.

Along with economic development and technological innovation, rapid expansion of agricultural machinery has sparked widespread concern. In particular, the superiority of scrapped agricultural machinery recycling and remanufacturing in improving environmental sustainability, economic benefits, and carbon emission reduction has garnered public attention. Based on this reality, this study constructs models for five different agricultural machinery recycling channels according to different actors involved in recovery, dismantling, and remanufacturing. Each model’s equilibrium is determined by mathematical deduction. The applicable condition of each model and the influence of multiple factors are analyzed. The results indicate the following: (i) no single recycling channel is definitely superior to others, and different channels have their own applicable conditions that are influenced by transfer payments, supply chain cooperation, recycling prices, and supply and demand; (ii) cooperative scenarios are more conducive to attracting third-party enterprises to participate to increase supply chain revenue; (iii) rise in recovery and remanufacturing prices may lead to divergence among supply chain parties on channel selection; and (iv) oversupply requires government subsidies to maintain recycling and remanufacturing.