A Decision-Making Model of Low-Carbon Supply Chain Based on Government Subsidy

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1 Intenational Jounal of Business and Manageent; Vol., No. ; 06 ISSN E-ISSN Published by Canadian Cente of Science and Education A Decision-Making Model of Low-Cabon Supply Chain Based on Govenent Subsidy Xu Qi & Xiao Li-Jun Gloious Sun School of Business and Manageent, Donghua Univesity, China Coespondence: Xu Qi, Gloious Sun School of Business and Manageent, Donghua Univesity, Shanghai 0005, China. E-ail: 36xlx@63.co Received: Novebe 9, 05 Accepted: Decebe 6, 05 Online Published: Januay 3, 06 doi:0.5539/ijb.vnp URL: Abstact In ode to study the ole of govenent subsidy in a low-cabon supply chain, a two-stage gae odel fo the subsidy of low-cabon technology and the subsidy of ecycling is built. And the optiized subsidy stategy unde the two kinds of subsidy policies is obtained. This pape also studies the ipacts of cabon eission abateent, subsidy and the factos of subsidy on the supply chain and the govenent, so as to copae the two kinds of subsidy stategy. This study shows that the coefficient of envionental benefits has a positive ipact on the two kinds of subsidy. The subsidy can stiulate the cabon eission abateent, and the fixed cost has a negative ipact on the will of the cabon eission abateent fo the entepises. Besides, the low-cabon pefeence of the consues has a positive ipact on the cabon eission abateent unde the subsidy of low-cabon technology. Futheoe, the govenent unde takes the ain costs of the low-cabon technology unde the subsidy of low-cabon technology. The envionental benefit also has a positive ipact on the subsidy and pofits of the govenent and the pofits of the supply chain unde the ecycling subsidy. Both kinds of subsidy stategies can achieve supply chain coodination. Keywods: supply chain, govenent subsidy, low-cabon technology, ecycling, gae theoy. Intoduction The pobles of cliate and enegy have geatly attacted the attention of the intenational counity. The inceasingly stingent intenational envionental laws, such as the United Nations Faewok Convention on Cliate Change and the Kyoto Potocol, have ade the govenent, entepises, and consues pay oe attention to low cabon. Howeve, because of the extenality of low cabon, the low-cabon stategies of entepises diven by the aket ight not be the best one, and vaied stategies of the govenent ae needed to poote the investent of entepises. Subsidies ae oe positive copaed to estictive policies, such as cabon tax, cabon eissions tading. Technical innovation is the coe of achieving low-cabon society, so the investent of technology ust be sustained and lage-scale. Meanwhile, invest in technology can be vey isky, so the investent is costly cuently. Wang (0) pointed out that fund shotage has seveely esticted the developent of low-cabon technology, so the ipoveent of subsidy syste is vital and ipending. Zhou (0) pointed out govenent policies had significant ipacts on the technological innovation of low-cabon technology. And investents fo the govenent subsidy plans on the ceation of low-cabon technology innovation platfos and the coecial applications of the achieveent can push the developents of the low-cabon technology. Fang (0) studied a thee-stage gae odel of the govenent and a duopoly supply chain, and espectively analyzed the ipact of govenent s subsiding entepises R&D and poduct innovation on eseach investent and social welfae. Meng (00) also analyzed the ipact of subsidy on the cabon eission eduction and social welfae unde diffeent eission taxes. Recycling has ade fowad supply chains convet to closed-loop supply chains. Saeek et al. (006) showed that closed-loop supply chains could have the ipact of enegy saving and eission eduction on envionental potection and esouce utilization. Kaine et al. (006) pointed out that closed-loop supply chains could be egaded as an effective caie to poote the developent of low-cabon econoy, with the developent of low cabon concept and sustainability awaeness, and any counties and eseach institutions had geatly suppoted closed-loop supply chains. Zhu et al. (00) studied the efficient of ecycling unde govenent

2 Intenational Jounal of Business and Manageent Vol., No. ; 06 subsidy, and found the entepise s axiu etun ate when the govenent was to axiize, eanwhile the subsidy had positive ipact on the pofits of entepises in the supply chains. Zhou et al. (0) built a two-echelon supply chain odel and found the conclusion that ecycling subsidy had positive effect on the pofits of entepises in the supply chain, etun ates and cabon eissions. Most of existing liteatues had sepaately studied the ipact of low-cabon-technology subsidy on entepise pofits, eission eduction and the ipact of ecycling subsidy on etun ate and entepise pofits. Howeve, thee ae few liteatues which have copaed the two kinds of subsidies, and study thei factos and influences. Heein, in this pape, we will concentate on analyzing the decision of the govenent and the copanies in the supply chain, unde the two kinds of subsidy stategies. This pape includes thee ain pats: () the factos which would affect low-cabon-technology subsidy, ecycling subsidy and cabon abateent; () the ipact of the low-cabon-technology subsidy and ecycling subsidy on low-cabon efficiency and pofits of the govenent and entepises in the supply chain; (3) the diffeences of the ipacts which low-cabon-technology subsidy and ecycling subsidy have on the supply chain and govenent adinistation. Based on the study above, this pape ay povide soe helpful suggestions fo supply chain s decision of investent in low-cabon technology, the decision of ecycling and govenent subsidy stategies.. Supply Chain Decision-Making Model unde Govenent Subsidy Stategy. Poble Desciption and Paaetes This pape consides a two-echelon supply chain which consists of one anufactue and one etaile. And the anufactue and etaile have an equal patneship. The anufactue geneates cabon eissions duing the poduction, and the etaile geneates cabon eissions duing the ciculation of poducts. The entepises can abate cabon eissions by investing in low-cabon technology and ecycling. Both low-cabon technology and ecycling will have a stong effect on entepises costs and pofits. The govenent would give pope subsidies to encouage the entepises in cabon abateent. By building the odel of low-cabon technology investent and the odel of ecycling, unde govenent subsidy, this pape studied the optiized subsidy stategy and cabon-abating stategy. So, a two-echelon gae odel unde two ways of cabon abateent is built, and the odel includes: () the govenent akes the subsidy policy at the fist stage; () the entepises in the supply chain ake the decision of cabon abateent. The ajo notations in ou following odel ae suaized in Table. Table. Model paaetes and the definitions Paaetes definitions w The unit wholesale pice of poducts chaged by the anufactue p Retail pice pe unit of poduct C Unit poduction cost of the anufactue of poduct D Deand of aket d П,П,П g Expected pofits of the etaile, anufactue and the supply chain CO,CO Cabon eissions of the etaile and anufactue pe poduct C,C Costs of cabon abateent fo the etaile and anufactue cost coefficient of low-cabon technology ΔD Change in deands when consues have low-cabon pefeence δ Raise coefficient of deands when poducts ae low-cabon θ,θ Eission eduction ates of etaile and anufactue pe poduct α,β Ipact factos of etaile and anufactue s investent in low-cabon poduct λ,λ Subsidy ates which the govenent invest in etaile and anufactue s low-cabon technology RF Envionental pofits coefficient of entepise s investent in cabon abateent A Fixed costs of ecycling τ Rate of ecycling e Cost coefficient of ecycling s Subsidy coefficient of ecycling ΔE Changes in cabon eissions of one poduct p Unit pice at which the etaile buys ecycling poducts fo the consues w Unit wholesale pice at which the anufactue buys ecycling poducts fo the etaile c Unit cost of eanufactued poducts ξ Cabon eission of one eanufactued poduct duing the eanufactuing pocess

3 Intenational Jounal of Business and Manageent Vol., No. ; 06. Supply Chain Decision-Making Model unde Low-Cabon-Technology Subsidy.. Model Assuptions Assuption. Low-cabon poducts and taditional poducts ae substitutable. Assuption. Low-cabon technology needs the investent of technology and equipent. Accoding to pevious liteatues about R&D, in this pape, we assue that Costs of low-cabon technology have a quadatic functional elationship between the eission eduction ates of etaile and anufactue, and the functions ae as follows: C C The γ in the functions above is cost coefficient of low-cabon technology, and epesents the difficulty level of low-cabon technology. θ, θ ae espectively the eission eduction ates of anufactue and etaile, and 0 θ <,0 θ <. So the total change in cabon eission is: E ( CO CO) D Assuption 3. Consues have the pefeence of low cabon, and low-cabon poducts have bigge aket deand. So the sales aount of the poducts consists of two ain pats, i.e., the oiginal deand D and the change in deand ΔD. D C C In the functions above, δ epesents the aise of deands when poducts ae low-cabon, and it eflects consues pefeence of low cabon. The α, β ae factos which easue how etaile and anufactue s investent in low-cabon technology affect poducts low cabonization, and 0<α<0.5, 0<β<0.5. Assuption 4. The anufactue and etaile have an equal patneship. Thee is exists infoation syety in the thee paties of the anufactue, etaile and govenent, i.e., the govenent knows the supply chain s investent in low cabonization. The govenent gives pope subsidies to the anufactue and etaile fo the expenditue of low cabon, and the subsidy coefficients ae λ, λ espectively. Assuption 5. The anufactue supply poducts accoding to the axiu deand D+ΔD... Modeling and Analysis Base on the above desciption and assuptions, the supply chain optiization odel unde low-cabon-technology subsidy is built. In the odel, the govenent gives pope subsidies to the anufactue and etaile fo the expenditue of low cabon, and the subsidy coefficients ae λ, λ espectively. θ, θ ae decision vaiable, and objective functions ae the entepises in the supply chain and the govenent s pofits. ) Pofit function of the anufactue The pofit of the anufactue includes the incoe fo selling poducts to the etaile,w, and govenent s subsidy λ C. The cost of the anufactue includes poduction cost, c, and the investent in low-cabon technology, C. So the pofit function can be descibed as the foula (). ( wc)( DD) C C ( w c)( D C C ) C C ( w c)[ D ( ) ( ) )] () ) Pofit function of the etaile The pofit of the etaile includes the incoe fo selling poducts to the consues, p, and govenent subsidy λ C. The costs of the etaile includes cost of puchasing poducts fo the anufactue, w, and the investent in low-cabon technology, C. So the pofit function of the etaile is as the foula (). 3

4 Intenational Jounal of Business and Manageent Vol., No. ; 06 ( p w)( D D ) C C ( p w)( D C C ) C C ( p w)[ D ( ) ( ) ] 3) Pofit function of the govenent The pofit of the govenent includes envionental benefits fo the entepises investent in low cabon, (C + C ) RF, and total pofit of the supply chain, П +П. The cost of govenent is the subsidy fo low-cabon technology, λ C +λ C. So the pofit function of govenent is as the foula (3). g ( C C) RF C C (3) ( )( RF ) ( pc)[ D ( ) ( ) ] In the above foula, RF epesents the envionental pofits coefficient of entepise s investent in cabon abateent, and 0<RF<. Poposition. On the condition of 0<RF<,0<α,β<0.5, thee exists the unique equilibiu solution of subsidy ates which the govenent invest in entepises and eission eduction ates of entepises, λ *, λ *, θ *, θ *, as follows. () * ( RF )( ) ( w c ) ( ) ( p c ) * ( RF )( ) ( p w ) ( )( p c) * ( ) ( ) ( ) ( w c) ( p w) ( w c) ( p w) * ( ) ( ) ( ) Poof of Poposition. Using the ethod of invese solution, in the second stage of the gae, the govenent has set the subsidy ate, and both the anufactue and etaile ty to axiize thei own benefits. Then the poble could be changed as follows: ax ( wc)[ D( ) ( ) ] (4) 0 ax ( pw)[ D( ) ( ) ] (5) 0 Fo foula (4), (5), the fist-ode conditions (FOC) ae as follows: ( w c) ( ) ( ) 0 ( p w) ( ) ( ) 0 By solving the syste of the two fist-ode conditions, foula (6), (7), the following solution is gained. (6) (7) * ( ) ( ) ( w c) ( p w) ( ) ( ) ( ) * ( ) ( w c) ( p w ) In the fist stage of the gae, the govenent set the optial subsidy ate to axiize its pofit, so the objective function is as follow. ax 0,0 ( ) ( ) ( g RF ( p c)[ D ) ] (0) (8) (9) 4

5 Intenational Jounal of Business and Manageent Vol., No. ; 06 Take foula (8), (9) into foula (0), and take the fist deivative of foula (6) with espect to λ,λ espectively. The subsidy ates, λ,λ, can be obtained. Then take foula (), () into foula(8), (9), so θ *, θ * can be obtained. Thus, poposition is tue. ( RF )( ) ( w c) ( )( p c) ( RF )( ) ( p w) ( )( p c) Popety. Fo foula (8) and (9), we can find that 0, 0, 0, 0, 0, 0 the govenent subsidies and consues pefeence fo low cabon have positive ipact on the entepises cabon abateent, howeve, the cost coefficient of low-cabon technology has negative cost coefficient of low-cabon technology. () (), i.e. Popety. Fo foula (), (), we can find that 0, R F 0 R F, unde the condition of 0 < RF <. RF has a positive ipact on λ, i.e. the envionent benefits oe fo the low-cabon technology, the govenent would be oe willing to encouage entepises in cabon abateent. Popety 3. Fo foula (), (), we can know w 0, 0 w, so w is the deteining facto in pofit distibution of the anufactue and etaile, when p and c ae settled. When w is bigge, the anufactue would get oe benefit, then the govenent would give less subsidy to the anufactue and give the etaile oe subsidy, and vice vesa. So the govenent s subsidy fo low-cabon technology can balance the anufactue and etaile s investent in cabon abateent, and the two entepises can obtain the best benefit..3 Supply Chain Decision-Making Model unde Recycling Subsidy.3. Model Assuptions Assuption. The anufactue can not only use new ateials to ake new poducts, but also can use ecycling poducts to ake eanufactued poducts. And the aket doesn t diffeentiate the two kinds of poducts. Assuption. The etaile sells the poducts and ecycles used poducts fo consues though its selling channels, and unit ecycling pice is p. The anufactue ecycles used poducts fo the etaile to ake eanufactued poducts, and the unit ecycling pice is w, the unit cost of eanufactuing is c. the eanufactued poducts ae also sold to etaile at the pice of w, and p < w < c- c. The govenent akes subsidy coefficient of ecycling subsidies, s, accoding to the ate of ecycling τ. Assuption 3. The fixed cost of ecycling is A(τ), and it is elated to τ, and A(τ)would incease when τ inceases. The functional elationship between A(τ)and τ is as follows. A() e The e in the function above is cost coefficient of ecycling, and e > 0. Assuption 4. The cabon eission duing the anufactue s eanufactuing pocess is ξ ties of cabon eission duing poduction with new ateials, and 0<ξ<, so the change in cabon eissions is E. E D( ) CO.3. Modeling and Analysis Base on the desciption and assuptions above, the low-cabon supply chain decision odel unde ecycling subsidy is built. In the odel, the govenent gives pope subsidies to the anufactue and etaile accoding to ate of ecycling, and ate of ecycling τ and subsidy coefficient of ecycling s ae decision vaiables and objective functions ae the entepises in the supply chain and the govenent s pofits. This subsidy stategy is aied to encouage the entepises in ecycling. ) Pofit function of the anufactue 5

6 Intenational Jounal of Business and Manageent Vol., No. ; 06 The pofit of the anufactue includes the incoe fo selling poducts to the etaile, wd. The cost of the anufactue includes poduction cost, but because of ecycling the unit cost tuns into (-τ)c+τ(c +w ), afte siplification it is c-τc+τc +τw. So the total poduction cost is(c-τc+τc +τw )D. So the pofit function is as the foula (3). ( wccc w ) D(3) ) Pofit function of the etaile The pofit of the etaile includes the incoe fo selling poducts to the consues,pd, the incoe fo selling ecoveed poducts to the anufactue, w τd, and govenent s subsidy sτ. The cost of the anufactue includes poduction cost, cd, the fixed cost of ecycling A, and the cost of ecycling used poducts fo the consue p τd. So the pofit function of the etaile is as the foula (4). ( p w w p) D A s ( ) p w w p D e s 3) Pofit function of the govenent The pofit of the govenent includes envionental benefits fo the entepises investent in low cabon ARF, and total pofit of the supply chain, П +П. The cost of govenent is the subsidy fo ecycling. So the pofit function of govenent is as the foula (5). g e RF s e RF ( p c c c p ) D e Poposition. On the condition of 0<RF<,thee exists the unique equilibiu solution of govenental subsidy ates and ate of ecycling. * * c c p c c p ( s, ) ( w p) D, RF e( RF ) Poof of Poposition. Fo foula (3) we can know τ has positive effect on pofit of the anufactue, as c >w +c. Using the ethod of invese solution, in the second stage of the gae, the govenent has set the subsidy ate s, and the etaile ake decisions to axiize its own benefit. Then the poble could be changed as follow: ax ( p w w p) D e s 0 (4) (5) (6) Take the fist deivative of foula (6) with espect to, ake the deivative equals to zeo, and solve the equation. Then we can get foula (7). ( w p) D e s 0 ( w p ) D s (7) In the fist stage of the gae, conside τ is known, the objective function is as follow. ax g s 0 e e RF ( p c c c p ) D e (8) Take foula (7) into foula (8), and take the fist deivative of foula (8) with espect to s. g ( w p ) D s s e * Solve the equation above. So we can get s, as foula (9). e( RF ) ( s ) ' ( c c p ) D ( s ) ' 0 c c p R F * s ( w p) D (9) Take foula (9) into foula (7), then * can be obtained as foula (0). Thus, poposition is tue. * c c p e( RF ) (0) 6

7 Intenational Jounal of Business and Manageent Vol., No. ; 06 Popety 4. Fo foula (7), we can know τ>0 when s=0, i.e. the entepisess will spontaneously ecycle used poducts even when the govenent doesn t give subsidy. And 0 s e, e 0, so subsidy coefficient of ecycling s has positive ipact on the ate of ecycling τ, and cost coefficient of ecycling e has negative ipact on τ. Popety 5. Fo foula (9), on the condition of 0 < RF <, RF has positive ipact on s. This eans when w the envionent benefits oe fo ecycling, the govenent would be oe willing to subsidize the etaile. Popety 6. Fo foula (7), ( w p ) D e when s=0, and w -p is aginal pofit of the etaile fo ecycling. So, without the govenent s subsidy, τ depends on the pofit fo ecycling. Fo foula (0), c-c-p is aginal pofit of the supply chain fo ecycling, so even with the govenent s subsidy, the etaile akes decisionss accoding to the supply chain s pofit. So ecycling akes the etaile ake decisions consideing the whole supply chain instead of its own pofits. 3. Copaative Analysis of Low-Cabon-Technology Subsidy and Recycling Subsidy Heein, we use atlab (R0b) to cay out the nueical siulation and find the solution of the above odels. Though copaing low-cabon-technology subsidy and ecycling subsidy, and analyzing the factos which w affect govenent subsidies and cabon abateent, we can know how RF affects the pofits of all the ebes in the subsidy stategy. This pape ties to povide soe theoetical suggestions fo entepises in the supply chain and elated depatents of the govenent. The paaetes ae set as follows: p=5, w=, c=0, D=50, CO =5, CO =3,α= =0.5, β=0., δ=0.0, γ=000, c =3, p=0., w =0.3, e=0, ξ= Analysis of Factos Influencing Subsidy Rates unde the Two Subsidy Stategies Low-cabon-technology subsidy Recycling subsidy Figue (a). RF s ipact on low-cabon subsidy Figue (b). RF s ipact on ecycling subsidy Fo the two pictues above, we can know that RF has positive ipacts on both subsidy ates in low-cabon-technology subsidy and ecycling subsidy, so this validates popety and popety 5. Copae the two pictues, we can know the subsidy ate of low-cabon-technology subsidy is highe than the subsidy ate of ecycling subsidy when RF = 0 (λ, λ > 0.9), and the subsidy ate inceases as RF inceases until it get, i.e., the govenent subsidizes copletely. In the ecycling subsidy stategy, thee is no subsidy when RF < 0.3, and the subsidy ate inceases as RF inceasess when 0.3 RF < 0.65, when RF 0.65 the subsidy ate equals to 00 and won t change any oe. Set RF = 0.5, w (c, p) ), and the othe paaetes will not change, we can get Figue (c). 7

8 Intenational Jounal of Business and Manageent Vol., No. ; 06 Figue (c). W s effect on supply chain ebes subsidy ates unde low-cabon technology Fo Figue (c), we can know when w inceases, the anufactue s pofit inceases, but its subsidy deceases, at the sae tie etaile s pofit deceases, but its subsidy inceases. So the govenent s subsidy can balance the anufactue and etaile s investent in cabon abateent and this validates popety 3. RF has positive ipacts on the subsidy ates of low-cabon-technology subsidy and ecycling subsidy stategy, but thei gowth pattens ae diffeent. The govenent should decide the subsidy ates accoding to pofit p distibution of the anufactue and etaile in ode to balance the two entepises investent in cabon abateent t unde low-cabon-technology subsidy. When coing to ecycling subsidy, the govenent should give subsidy accoding to envionent s benefit fo ecycling. 3. Analysis of Factos Influencing Cabon Abateent unde the Two Subsidy Stategies Low-cabon-technology subsidy Recycling subsidy Figue (a). Subsidy ate s effect on eission Figue (b). Subsidy coefficient s effect on eduction ate ecycling ate Figue (c). Low-cabon-technology subsidy s Figue (d). Recycling subsidy s effect on cabon abateent cabon abateent effect on We can know subsidy ates have positive ipact on eission eduction ates fo Figue (a), so this validates the elevant content in popety. Unde low-cabon-technology subsidy, the eission eduction ate inceases vey slowly at fist, but when subsidy ate is close to 00%, then eission eduction ate inceases quickly to 00%. Fo Figue (b) ), we can see subsidy ate has positive ipact on ecycling ate, and the ecycling ate is 50% when subsidy ate equals to zeo, so the entepises will spontaneously ecycle used poducts even when the govenent doesn t give subsidy, and this validates the elevant content in popety 4. Copae Figue (c) and Figue (d), we can find the highest aount of cabon abateent of low-cabon-technology subsidy is highe than ecycling subsidy, and the eason is that both the anufactue and 8

9 Intenational Jounal of Business and Manageent Vol., No. ; 06 etaile invest in cabon abateent in low-cabon-technology affecting the supply chains cabon abateent. The cost coefficient of subsidy, but only the anufactue educes its cabon eission in ecycling subsidy. Except the subsidy, thee ae othe factos low-cabon technology γ and consue s pefeence to low-cabon poducts δ also affect cabon abateent, as Figue (e) and Figue (f). Set RF = 0.9, γ (0, 000), and the othe paaetes will not change, we can get Figue (e). When γ<7, the eission eduction ates equal to 00% %, and decease when γ inceases. Set RF = 0.9, δ (0, ), and the othe paaetes will not change, we can get Figue (f). We can see consue s pefeence to low-cabon poducts δ has positive ipaction eission eduction ates. The popety has been validated copletely so fa. Low-cabon-technology subsidy Figue (e). The γ s effect on eission eduction ates Figue (f). The eduction ates δ s effect on eission Unde ecycling subsidy, cost coefficient of ecycling e also affects ecycling ate. Set RF = 0.5, e (0, 00) and the othe paaetes will not change, we can get Figue (g).when e is vey low the ecycling ate is 00%. And ecycling ate deceases when e inceases. The popety 4 has been validated copletely so fa. Figue (g). The e s effect on ecycling ate To su up, unde low-cabon-technology subsidy stategy, the factos affect eission eduction ates ae subsidy ates, the cost coefficient of low-cabon technology, and consue s pefeencee to low-cabon poducts. Unde U ecycling subsidy stategy, the factos affect ecycling ates include subsidy ate sand cost coefficient of ecycling. The subsidy ates have positive ipact on both eission eduction ate and ecycling ate, but the gowth pattens ae diffeent. And cost coefficients have negative ipact on both eission eduction atee and ecycling ate. Besides consue s pefeence to low-cabon poducts also has positive ipact on eission eduction ate. 9

10 Intenational Jounal of Business and Manageent Vol., No. ; The Ipact Analysis of RF on Supply Chain Mebes Pofits unde the Two Subsidy Stategies Low-cabon-technology subsidy Recycling subsidy Figue 3( (a). RF s effect on eission eduction ate Figue 3(b). RF s effect on ecycling ate Figue 3(c). RF s effect on ebes pofits unde Figue 3(d). RF s effect on ebes pofits unde low-cabon-technology subsidy ecycling ate Fo Figue 3(a) and Figue 3(c), we can know that unde low-cabon-technology subsidy stategy, as RF inceases, the eission eduction ates inceases, but the pofits of supply chain ebes just incease a little. l When RF > 0.9, pofit of the govenent deceasess quickly as govenent unde takes the ost investent in low-cabon technology though givingg subsidies. Fo Figue 3(b) and Figue 3(d), we can know that unde ecycling subsidy stategy, when RF < 0.3, govenent doesn t give subsidy and ecycling ates, pofits keep unchanged. When 0.3 RF < 0.65, govenent subsidy ates, ecycling ates and pofits incease as RF inceases. When RF 0.65, ecycling ates each 00%, pofits each the axiu value, and govenent will not give subsidy any oe. So when w govenent gives subsidy fo ecycling, all the ebes in the ecycling subsidy stategy could gain oe pofit. To su up, low-cabon-technologpofits. The pofits of the ebes just change a little unde low-cabon-technology subsidy stategy, and the govenent undetakes the ost investentt in low-cabon technology. Unde ecycling subsidy stategy, when RF inceases to a point whee the govenent is willing to give subsidies, all the ebes pofits incease as RF incease until the etaile s ecycling ate eaches 00%. subsidy stategy and ecycling subsidy stategy have diffeent ipact on the ebes 4. Conclusion This pape analyzes the factos which affect cabon abateent and subsidies unde two kinds of subsidy stategies as well as how the subsidiess affect the supply chain and the govenent. Moeove, we also copae the siilaities and diffeences of the two subsidy stategies by building a two-stage gae odel unde the subsidy of low-cabon technology and the subsidy of ecycling. Based on the above analysis and discussions, we can have the following conclusions. () RF has positive ipact on the subsidy ates of low-cabon-technology subsidy and ecycling subsidy stategy, but thei gowth pattens ae diffeent. The govenent should decide subsidy ates accoding to pofit p distibution of the anufactue and etaile, unde low-cabon-technology subsidy. Unde ecycling subsidy, the govenent should give subsidy accoding to envionent s benefit fo ecycling. () The subsidy ate shows positive ipact on both eission eduction ate and ecycling ate, while the cost 30

11 Intenational Jounal of Business and Manageent Vol., No. ; 06 coefficients have negative ipacts on both eission eduction ate and ecycling ate. Consue s pefeence to low-cabon poducts also has positive ipact on eission eduction ate. So the govenent should help consues to enhance thei awaeness of low-cabon life concepts to ipove the eission eduction ate. (3) As RF inceases, the pofits of the ebes just change a little unde low-cabon-technology subsidy stategy, and the govenent undetakes ost of the investents in low-cabon technology. Howeve, when 0.3 RF < 0.65, the govenent is willing to give subsidies, and all the ebes pofits incease as RF incease. (4) The govenent subsidies ae given accoding to the pofit distibution of the entepises, which can balance the anufactue and etaile s investent in cabon abateent unde low-cabon technology subsidy stategy. The ecycling subsidy akes the etaile ake decisions consideing the whole supply chain instead of its own pofits. Refeences D Aspeont, C., & Jacquein, A. (988). Coopeative and no-coopeative R & D in duopoly with spilloves. The Aeican Econoic Review, 78(5), Fang, H. Y., Da, Q. L., & Zhu, C. N. (0). Entepises pefoance unde diffeent R&D subsidy stategies of the govenent. Industial Engineeing, 5(), Kaine, N., & Richad, B. H. (006). Geen consues and public policy: On socially contingent oal otivation. Resouce and Enegy Econoics, 8(4), Meng, W. J. (00). Copaison of subsidy and coopeative stategies based on eission abateent. Systes Engineeing, 8(), 3-6. Saee K., & Malegeat P. (006). Stategic alliance in a closed-loop supply chain, a case of anufactue and eco-non-pofit oganization. Technovation, 6(0), Wang H. (0). Financing policies poote the low-cabon econoic developent. Review of Econoic Reseach, (54), 8. Zhou, J. P., Nie, H. L., & Zhang, H. (0). Analysis of the closed - loop supply chain s cabon abateent effect based on govenental ecycling subsidy. Chinese Jounal of Manageent Science, 9, Zhou, W. Q., & Nie, M. (00). Public policy pactice and evelations of pooting the innovation of low-cabon technology. Fou on Science and Technology in China, 83(7), 8-3. Zhu, X. X., & Zhang, Q. (00). Efficiency analysis of the eanufactuing closed-loop supply chain unde govenental subsidy. Supply Chain Manageent, 9(), Copyights Copyight fo this aticle is etained by the autho(s), with fist publication ights ganted to the jounal. This is an open-access aticle distibuted unde the tes and conditions of the Ceative Coons Attibution license ( 3