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Research on enterprises emission reduction technology innovation strategies with government subsidy and carbon trading mechanism

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  • Qunli Wu
  • Xinxin Xu
  • Ye Tian

Abstract

This paper establishes a differential game model to explore the interaction strategies among the government and supply chain enterprises under carbon trading mechanism and subsidies. By applying the principle of optimal control, we obtain the optimal solutions of the government and supply chain players with different scenarios. Research findings indicate that without cost‐sharing, the decision types between enterprises do not affect the low‐carbon technology (LCT) innovation level and subsidies. However, with a cost‐sharing contract, the emissions strategies of the supply players are achieved Pareto optimal. Specially, for government regulation, only when the proportion of cost‐sharing between enterprises reaches a reasonable range can government regulation make the better effect.

Suggested Citation

  • Qunli Wu & Xinxin Xu & Ye Tian, 2022. "Research on enterprises emission reduction technology innovation strategies with government subsidy and carbon trading mechanism," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2083-2097, September.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:2083-2097
    DOI: 10.1002/mde.3510
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    References listed on IDEAS

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    4. Rennings, Klaus & Ziegler, Andreas & Ankele, Kathrin & Hoffmann, Esther, 2006. "The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance," Ecological Economics, Elsevier, vol. 57(1), pages 45-59, April.
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    7. He, Senyu & Yin, Jianhua & Zhang, Bin & Wang, Zhaohua, 2018. "How to upgrade an enterprise’s low-carbon technologies under a carbon tax: The trade-off between tax and upgrade fee," Applied Energy, Elsevier, vol. 227(C), pages 564-573.
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    1. Cai, Dong & Zhang, Guoxing & Lai, Kee-hung & Guo, Chunxiang & Su, Bin, 2024. "Government incentive contract design for carbon reduction innovation considering market value under asymmetric information," Energy Policy, Elsevier, vol. 186(C).

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