Description:
This paper considers an industrial symbiosis chain in which an upstream manufacturer produces waste accompanying production. A downstream manufacturer can recycle waste to replace raw materials for clean production. We conduct three scenarios of the symbiotic chain and derive solutions, including optimal output, product pricing, abatement level, waste transaction pricing, and profits. Then we compare the three scenarios to investigate the impact of industrial symbiosis and carbon cap and trade on firms’ economic and environmental performance. Sensitivity analysis and numerical simulations are provided. The results of our study indicate that the government can allocate more carbon emission allowances to promote firms implementing carbon emission reduction under moderate regulation. Moreover, firms in a symbiotic chain could achieve a win-win situation through industrial symbiosis, and waste disposal cost plays a significant role in the symbiotic performance