The development of the low-carbon economy has prompted many manufacturing enterprises to choose the remanufacturing mode with a low cost and low carbon emission characteristics. Due to the larger amount of capital investment for remanufacturing, many remanufacturing enterprises are often faced with insufficient funding, and the remanufacturer needs to seek a suitable financing pattern to obtain financial support. In this sense, we consider a monopoly remanufacturer and compare the optimal operational decision under two financing methods, i.e., carbon asset pledge financing (CAPF) and equity financing (EF). We find that whether the remanufacturer adopts EF or CAPF is determined by the dividend ratio or their initial capital, and only when the dividend ratio or their initial capital meets a certain condition can it benefit from the EF or CAPF. Compared with the scenario of capital constraint without financing, the adoption of CAPF or EF can always increase the volume of new products, consumer surplus, and environmental impact. For underfunded remanufacturers, adopting CAPF is more favorable than the production of remanufactured products than EF; however, the EF always has a higher contribution rate to consumer surplus and environmental impact than the CAPF. Only when the dividend ratio is in the appropriate range can the remanufacturer obtain the most profit; otherwise adopting the CAPF is more profitable.
Citation: Shuaishuai Fu, Dandan Wang, Chengya Lin, Zhuoer Li. Which is better for remanufacturing: carbon asset pledge financing vs equity financing?[J]. Journal of Industrial and Management Optimization, 2026, 22(4): 1847-1869. doi: 10.3934/jimo.2026068
The development of the low-carbon economy has prompted many manufacturing enterprises to choose the remanufacturing mode with a low cost and low carbon emission characteristics. Due to the larger amount of capital investment for remanufacturing, many remanufacturing enterprises are often faced with insufficient funding, and the remanufacturer needs to seek a suitable financing pattern to obtain financial support. In this sense, we consider a monopoly remanufacturer and compare the optimal operational decision under two financing methods, i.e., carbon asset pledge financing (CAPF) and equity financing (EF). We find that whether the remanufacturer adopts EF or CAPF is determined by the dividend ratio or their initial capital, and only when the dividend ratio or their initial capital meets a certain condition can it benefit from the EF or CAPF. Compared with the scenario of capital constraint without financing, the adoption of CAPF or EF can always increase the volume of new products, consumer surplus, and environmental impact. For underfunded remanufacturers, adopting CAPF is more favorable than the production of remanufactured products than EF; however, the EF always has a higher contribution rate to consumer surplus and environmental impact than the CAPF. Only when the dividend ratio is in the appropriate range can the remanufacturer obtain the most profit; otherwise adopting the CAPF is more profitable.
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Shuaishuai Fu, Dandan Wang, Chengya Lin, Zhuoer Li. Which is better for remanufacturing: carbon asset pledge financing vs equity financing?[J]. Journal of Industrial and Management Optimization, 2026, 22(4): 1847-1869. doi: 10.3934/jimo.2026068
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