Carbon Trading and Green Technological Innovation: Authorized Remanufacturing Under Carbon Allowance Allocation and CCER

Under carbon reduction targets, the joint operation of carbon allowance allocation and the Chinese Certified Emission Reduction (CCER) mechanism plays a critical role in shaping firms’ operational decisions. We provide empirical evidence that carbon trading promotes green innovation. Against this backdrop, this study formulates a Stackelberg game framework for an authorized remanufacturing supply chain composed of an original manufacturer and a remanufacturer. The model incorporates the CCER mechanism to examine how different carbon allowance allocation rules influence supply chain decisions and performance. The main findings are summarized as follows: (1) The joint mechanism raises enterprises’ marginal carbon expenses, thus increasing product prices and redirecting demand from new items to remanufactured alternatives. (2) The grandfathering promotes higher recycling rates and can generate larger profits for both supply chain members when the CCER price surpasses a certain threshold. (3) When new products exhibit high carbon intensity, the grandfathering rule simultaneously improves consumer surplus and reduces overall environmental impact, revealing a trade-off between economic efficiency and environmental performance. These results provide insights into carbon allowance allocation and support carbon market design and low-carbon transitions in remanufacturing supply chains.