Competitive advantage of qualified WEEE recycl 2017 European Journal of Oper

Most waste appliances in China are managed by unqualified recyclers rather than qualified ones equipped with advanced yet costly technologies. To tackle this issue, China has enacted several take-back laws under the Extended Producer Responsibility (EPR) framework, complemented by a self-financing subsidy mechanism. Our study aims to analyze the efficacy of these legislations through a two-period model comprising a selling phase operated by a manufacturer and a recycling phase involving two recyclers. We demonstrate that the self-financing requirement establishes an upper limit for the subsidy, which is not consistently responsive to the competitiveness of recyclers. Significantly, this limit diverges from the optimal subsidy level that maximizes social welfare, indicating that a larger subsidy does not necessarily equate to greater welfare. Our numerical analysis reveals that while these legislations enhance environmental performance, they concurrently reduce the overall profits of both the manufacturer and recyclers. Interestingly, the impact on consumer surplus remains ambiguous, as these legislations may either diminish or maintain consumer welfare. This paper contributes valuable insights into the complex relationships between regulations, recycling practices, and economic impacts within the context of China’s hazardous waste management.