Carbon Trading in China Reduces the Dependence of Household Waste Electrical and Electronic Equipment Recycling on Government Subsidies

China's enterprises of waste electrical and electronic equipment (WEEE) recycling suffer from low profitability that is highly dependent on government subsidies. This low economic gain impedes the sustainable growth of China's WEEE-recycling sector and also adds to the government's financial burden. Prior life-cycle studies have approved the carbon reduction potentials or net carbon credit of recycling WEEE. However, policymakers fail to know whether the revenue from selling carbon credits can offset the government's financial subsidy. We performed life-cycle and cost-benefit analyses for a case recycling enterprise that processes six categories of household appliances. The results show that the reduction potentials of greenhouse gases range from 930-3450 kgCO2e by recycling per ton of household appliances and materials substitution. The recycling enterprise would gain extra revenue ranging from 32 to 160 RMB per ton of appliance if the carbon credits were sold at China's current carbon price, i.e., 45-60 RMB tCO2e-1. Recycling waste refrigerators exhibits the highest carbon revenue, offsetting 6-17% of the government's financial subsidy. Microcomputers, by contrast, indicate the lowest carbon revenue, equivalent to 1-3% of its highest government subsidy. For each household appliance category, when the carbon price reaches 270-600 RMB tCO2e-1, selling carbon credits can fully offset the government's financial subsidy. Constrained by the processing capacity of the case enterprise, optimizations for appliance-recycling composition contribute a 15-25% profit growth to the current economic gains. Interpreting the specific profit depends on the predefined scenarios of carbon price and the substitution rate of the regenerated materials for the virginal ones. Our findings show that raising the profitability of WEEE recycling enterprises through the carbon trading policy contributes to the sustainable growth of China's WEEE-recycling sector while alleviating the government's financial burden.