WASTE EMISSION REDUCTION DECISION-MAKING FOR INDUSTRIAL SYMBIOSIS CHAINS IN A COMPETITIVE MARKET CONSIDERING ENVIRONMENTAL REGULATIONS

Abstract

We develop a perfect competitive upstream and downstream manufacturers model in an industrial symbiosis chain that produces partially differentiated products and generates pollution as a byproduct. We investigate the waste emission reduction decision-making of the industrial symbiosis chain in a competitive market while considering environmental regulations imposed by policy-makers or the government in the form of waste emission taxes and subsidies for waste usage. We prove that environmental regulation and market competition positively affect manufacturers' strategies to implement industrial symbiosis. In addition, we discover that implementing industrial symbiosis requires government leadership, while the market mainly plays a supporting role. Similarly, we show that the degree of competition plays a critical role in determining the economic consequences of environmental regulation. Our results suggest that the government or policy-makers should consider market competition when making environmental regulations. Through our simulations, when the upstream and downstream market sizes are the same, we discover that regardless of the market size, as the market competition becomes fiercer, the profit of the centralized model always dominates that of the other models. At the same time, a waste emission contract can be the technique to improve the performance of the decentralized industrial symbiosis chain. We further find that the market size does not affect the manufacturers' final strategies but only has a specific impact on the value