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Co-evolutionary game of manufacturers’ abatement behavior under carbon tax-subsidy policy
[Combating global climate change: why a carbon tax is better response to global warming than cap and trade]

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  • Suyong Zhang
  • Chuanxu Wang
  • Panos M Pardalos

Abstract

In the context of carbon tax-subsidy policy, our paper develops the models of the tripartite evolutionary game between consumers, manufacturers and local governments and analyzes the impacts of carbon tax-subsidy policy on the strategies of consumers, manufacturers and local governments. Through the construction of replicated dynamic equations, we get the evolutionary stable strategy. Then, the numerical analysis is performed with system dynamics simulation. The results show that (i) the local governments should strengthen the consumers’ awareness of environmental protection through higher financial subsidies, (ii) the taxation intensity coefficient accelerates the dynamic system to evolve into a stable state and (iii) an appropriate punishment by the government accelerates the dynamic system to evolve into a stable state. Our research is expected to provide a reference for local governments to implement effective carbon tax-subsidy policy on manufacturers.

Suggested Citation

  • Suyong Zhang & Chuanxu Wang & Panos M Pardalos, 2021. "Co-evolutionary game of manufacturers’ abatement behavior under carbon tax-subsidy policy [Combating global climate change: why a carbon tax is better response to global warming than cap and trade]," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 16(4), pages 1217-1228.
    • Handle: RePEc:oup:ijlctc:v:16:y:2021:i:4:p:1217-1228.
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    File URL: http://hdl.handle.net/10.1093/ijlct/ctaa081
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    References listed on IDEAS

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    1. Bansal, Sangeeta, 2008. "Choice and design of regulatory instruments in the presence of green consumers," Resource and Energy Economics, Elsevier, vol. 30(3), pages 345-368, August.
    2. Raufer, Roger & Li, Shaoyi, 2009. "Emissions trading in China: A conceptual ‘leapfrog’ approach?," Energy, Elsevier, vol. 34(7), pages 904-912.
    3. Bansal, Sangeeta & Gangopadhyay, Shubhashis, 2003. "Tax/subsidy policies in the presence of environmentally aware consumers," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 333-355, March.
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    Cited by:

    1. Jin, Tao & Jiang, Yulian & Liu, Xingwen, 2023. "Evolutionary game analysis of the impact of dynamic dual credit policy on new energy vehicles after subsidy cancellation," Applied Mathematics and Computation, Elsevier, vol. 440(C).

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