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The Impact of Government Subsidies on the Low-Carbon Supply Chain Based on Carbon Emission Reduction Level

Author

Listed:
  • Biao Li

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

  • Yong Geng

    (College of Environmental Science and Engineering, Shanghai Jiao Tong University, Shanghai 200240, China)

  • Xiqiang Xia

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

  • Dan Qiao

    (College of Business, Zhengzhou University, Zhengzhou 450001, China)

Abstract

To improve low-carbon technology, the government has shifted its strategy from subsidizing low-carbon products (LCP) to low-carbon technology. To analyze the impact of government subsidies based on carbon emission reduction levels on different entities in the low-carbon supply chain (LCSC), game theory is used to model the provision of government subsidies to low-carbon enterprises and retailers. The main findings of the paper are that a government subsidy strategy based on carbon emission reduction levels can effectively drive low-carbon enterprises to further reduce the carbon emissions. The government’s choice of subsidy has the same effect on the LCP retail price per unit, the sales volume, and the revenue of low-carbon products per unit. When the government subsidizes the retailer, the low-carbon product wholesale price per unit is the highest. That is, low-carbon enterprises use up part of the government subsidies by increasing the wholesale price of low-carbon products. The retail price of low-carbon products per unit is lower than the retail price of low-carbon products in the context of decentralized decision making, but the sales volume and revenue of low-carbon products are greater in the centralized decision-making. The cost–benefit-sharing contract could enable the decentralized decision model to achieve the same level of profit as the centralized decision model.

Suggested Citation

  • Biao Li & Yong Geng & Xiqiang Xia & Dan Qiao, 2021. "The Impact of Government Subsidies on the Low-Carbon Supply Chain Based on Carbon Emission Reduction Level," IJERPH, MDPI, vol. 18(14), pages 1-19, July.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:14:p:7603-:d:595948
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    2. Hongxia Zhao & Guangming Xu & Lu Liu & Changchun Shi & Huijuan Zhao, 2023. "Low-Carbon Technology Innovation Decision Making of Manufacturing Companies in the Industrial Internet Platform Ecosystem," Sustainability, MDPI, vol. 15(4), pages 1-17, February.
    3. Sun, Wen & Hao, Xinyu & Zhang, Xiaoling, 2024. "Climate policy interactions: Capturing game signals in carbon markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 198(C).
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    8. Fayu Chen & Jinhao Liu & Xiaoyu Liu & Hua Zhang, 2023. "Static and Dynamic Evaluation of Financing Efficiency in Enterprises’ Low-Carbon Supply Chain: PCA–DEA–Malmquist Model Method," Sustainability, MDPI, vol. 15(3), pages 1-17, January.
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