Abstract: A study is conducted on the decision of production and emission reduction investment of manufacturing/remanufacturing enterprises considering carbon quota pledge financing under capital constraints. Two mathematical models about no-financing and having carbon quota pledge financing considering capital constraints are established, and then the impact of self-owned capital and effect parameters of emission reduction on product, carbon emissions and total profit are analyzed by examples. The result shows that in the case of capital constraints, carbon quota pledge financing can increase production and profits, but it may also lead to an increase in total carbon emissions, which contradicts the purpose of reducing carbon emissions. The company's ability to reduce emissions is positively related to the accumulation of emission reduction effects. The amount of accumulation is small when it is not financed. Choosing financing can lay a foundation for the company to achieve a win-win situation in the future.

Key words: capital constraints, carbon quota pledge financing, emission reduction investment, carbon trading, manufacturing/remanufacturing