Effects of the Carbon Credit Policy on the Capital-Constrained Manufacturer’s Remanufacturing and Emissions Decisions

Abstract

Considering the effect of carbon emission factors on financing, a carbon credit policy was introduced to explore the capital-constrained manufacturer’s remanufacturing and carbon emission decisions. Meanwhile, this paper also explored the bank’s optimal strategy according to the manufacturer’s decision feedback. The results showed the following: (1) The restraining effect of the carbon threshold will directly affect whether the carbon credit policy can positively affect manufacturers’ remanufacturing and carbon emissions. (2) When the carbon savings level of remanufactured products is higher, the carbon credit policy can better promote remanufacturing activities and effectively control total carbon emissions. (3) The bank’s optimal preferential interest rate for loans is inversely correlated with the carbon threshold. Moreover, under a given carbon threshold, a higher preferential interest rate for loans is also conducive to manufacturers carrying out more or a more extensive range of remanufacturing activities while banks maximize total profit. Based on these findings, this paper also provided managerial insights for manufacturers and policy implications for policy-makers.