EPR Institution And Practice Of Automobile Recycling Management In China

After the reform and open,China’s economy has achieved remarkable achievements.The automobile industry,which is one of the pillars of the national economy,has developed rapidly.In 2017,the domestic automobile production and sales volume were 29 million and 28 million respectively,which was the number one worldwide for many years.Until 2017,national car ownership reached 209 million in China.However,the recycling of scrapped automobiles is the shortcoming of the Chinese automobile industry.The shortcomings have shown in several aspects: firstly,the scrap rate of vehicles in China is very low,the average scrap rate is only about 3.5% of the car ownership,which is lower than the level of 6% to 8% in developed countries.Second,the recycling rate is also low.Only 30% of scrapped cars are recycled through formal channels.Third,the car reusing rate is low.Due to technical constraints,the reusing rate of scrapped vehicles in China is only about 80%,while the recycling rate in developed countries can reach over 95%.All the evidence demonstrates that China’s automobile recycling management is urgent to be improved.The main reasons as follow: the severe lack of laws and regulations;the insufficient responsibility of automobile producers;the chaotic operation;technical limitation of the automobile recycling industry;and the lack of environmental awareness of consumers.In the context of the economic globalization of the automobile industry,this paper focus on using the idea of Extended Producer Responsibility(EPR)to solve the problems in China’s automobile recycling.Use the good examples of automobile recycling management system and standards in developed countries to make suggestions for improving the automobile recycling management system in China at this stage.The main structure of the article is: In chapter 1,the article explain the domestic and international research on the EPR system of the automobile industry.According to the literature,two important concepts are explained which are the Extended Producer Responsibility and the Global Innovation Network.Chapter 2 has sorted out the development of automobile recycling management and related institutional standards in the European Union,the United States,Japan,and China.It used automobile recycling management in developed regions to compare with the current situation in China.Then,it proposed four major problems existing in China’s automobile recycling management from the perspective of the four main bodies of automobile recycling management.The problems are: from the government level,there is a severe lack of laws and regulations;from the perspective of producers,producers have not taken responsibility for automobile recycling;from the perspective of automobile recycling industry,the automobile recycling industry doesn’t have sufficient capacity to recycle all the vehicles;from the perspective of consumers,consumers have not fulfilled their obligations to recycle their scrapped vehicles and their environment awareness needs to be improved.Chapter 3 researched the EPR of the automobile industry in European Union,the United States,and Japan,then combined with China’s national conditions,the multi-agent interaction framework of the automobile recycling management system is proposed.It has the characteristics of the global innovation network,and emphasizes the interaction and cooperation between various entities(automobile producer,government,consumer and automobile recycling enterprise)in the management system,and attaches importance to the green system and standard innovation in cooperation.According to the characteristics of this management framework,the following suggestions are proposed: legally improve the EPR system and establish a standard system,improve the supervision system of automobile recycling management,encourage the remanufacturing of automobile parts,and establish a vehicle recycling treatment fund.In chapter 4,the game theory method is used to study the specific implementation of EPR recycling management in China’s automobile industry.According to the four recycling strategies of automobile companies,four five-stage game models are made,and the reverse induction method is used to calculate the equilibrium results.We come up with several conclusions: first,the optimal recycling ratio is inversely proportional to the quality difference of vehicle products and is proportional to the marginal pollution of scrapped automobiles.Second,to achieve maximum social benefits and recycling ratio,companies should recycle their products by themselves.Third,low-product-quality companies would employ third-party companies to recycle their vehicles and recycle by themselves is a dominant strategy for high-product-quality companies.Fourth,when the marginal pollution of automobiles is small,car companies choose to recycle by themselves to get the maximum social benefits.When the marginal pollution of automobiles is large,low-product-quality companies will employ third-party companies to maximize social benefits.According to the results of the game models,the paper proposed some suggestions for the operation of EPR recycling management and structured a management framework in China’s automobile industry.The final chapter is the conclusions and policy recommendations,as well as the outlook for future research.