Game-Based System Dynamics Simulation of Power Battery Recycling Policy: A Case Study in Shenzhen, China

Abstract

Electric vehicle (EV) use is increasing rapidly all over the world. This is especially true in China, which brings a dramatic rise in demand for power batteries. After the end of their service life, irregular disposal of spent power batteries would lead to great threaten to environment and human health. In order to promote recycling of spent power batteries, a deposit-refund mechanism is implemented in Shenzhen: a levy of disposal fee on the purchase of EV, and a subsidy on the recycling. This study aims to explore the effects of deposit-refund policy on the development of power battery recycling industry using game theory and system dynamics methodology. Three single-factor changing scenarios and four two-factors changing scenarios are simulated and analyzed. The results shows that:

1) increasing recycling subsidy, reducing recycling cost, and enhancing consumers’ environmental awareness can effectively improve recycling rate and total profit; in the long run, the improvement effects of enhancing consumers’ environmental awareness are most obvious;

2) Raising levy of disposal fee can effectively make up the recycling subsidy gap caused by increasing recycling subsidy and enhancing consumers’ environmental awareness;

3) Decreasing recycling subsidy will not cause a sharp drop in recycling rate and total profit with the continuous reduction in recycling cost and gradual enhancement of consumers’ environmental awareness.

Note: This work was supported by the National Natural Science Foundation of China (No.71473013).