The Impact of Carbon Allowance Allocation Rules on Remanufacturing Decisions in a Closed-Loop Supply Chain

Remanufacturing has been widely adopted in the industrial sector due to carbon emission constraints and economic benefits. This paper discusses a closed-loop supply chain composed of an original equipment manufacturer (OEM), authorized remanufacturer (AR), that is licensed by OEM carry out remanufacturing activities presence strategic consumers under cap-and-trade regulations. We establish Stackelberg game model identify optimal manufacturing/remanufacturing decisions made members, compare impacts two different allowance allocation rules on production profits, environment. The results showed are affected price, allocation, consumer preferences for remanufactured products. In addition, high-emission enterprises, grandfathering rule performs better than benchmarking rule, yielding higher profits less environmental impact. government should take into account actual technological developments, implement low-emission apply enterprises.