Abstract: To analyse the impact of carbon trading on remanufacturing under intellectual property protection, two remanufacturing models (outsourcing remanufacturing and warranty remanufacturing) are developed between an original equipment manufacturer (OEM) and a remanufacturer under carbon trading. Based on the optimal solution of the game model, the impact of carbon trading on the manufacturing/remanufacturing decisions of original producers and remanufacturers is first analyzed; second, the impact of carbon trading on societal welfare (including producer profits, environmental impacts, consumer surplus, and societal surplus for both products) is examined. The results of the study are as follows: (1) When the ratio of environmental impacts per unit of remanufactured products and per unit of new products is low, carbon trading can effectively promote the recycling of waste products and the sale of remanufactured products. When the price of emission allowance trading is above a certain threshold, the profit of OEMs and remanufacturers is positively related to the unit price of carbon trading. (2) Based on carbon trading, the OEM can increase revenue by lowering the unit price of remanufacturing when remanufacturing is approved; when remanufacturing is outsourced, the OEM can transfer revenue by lowering the unit price of remanufacturing and increasing the unit price of outsourcing remanufacturing. (3) The OEM always prefers to outsource remanufacturing; the remanufacturer prefers to outsource remanufacturing only when the consumer preference and the amount of waste product recycling meet certain conditions. (4) Consumer and social surplus is always higher when remanufacturing is outsourced, and if the ratio of environmental impact per unit of remanufactured products to that per unit of new products is low, the environmental impact of outsourcing remanufacturing is low.

Key words: carbon trading; intellectual property rights; outsourcing remanufacturing; warranty remanufacturing