Optimizing Remanufacturing under Blockchain and Voluntary Carbon Markets: Incentives and Coordination Contracts

Abstract This research paper discusses a blockchain remanufacturing supply chain that operates under a voluntary emission reduction scheme. It stresses the strategic maneuvers of an original equipment manufacturer and an independent remanufacturer. The researchers used a game-theoretic framework to evaluate different outsourcing and authorization structures while considering blockchain transparency, consumer privacy preferences, and carbon-credit monetization. It is revealed that higher prices for voluntary emission reductions are likely to redirect production to remanufactured items and reinforce the incentives for research and development aimed at emission reduction. Moreover, the introduction of blockchain technology is said to have a positive effect on consumer confidence and the environmental claims' authenticity. However, the decentralized decision-making system may still inefficiently cause double-marginalization and uncooperative abatement incentives. The results suggest cost-sharing and two-part tariff contracts as solutions to replicate centralized outcomes and allow voluntary participation. The study extends to remanufacturer driven R&D where a non-linear relationship between carbon-credit price and eco-efficiency is discerned. At last, the findings provides valuable insights are helpful for the creation of economically efficient and environmentally sustainable coordination modalities, transparency policies, and carbon market strategies.