Low-Carbon Policies and Power Generation Modes: An Evolutionary Game Analysis of Vertical Governments and Power Generation Groups

Jun Yu () and Zongxian Feng
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Jun Yu: Jinhe Center for Economic Research, Xi’an Jiaotong University, Xi’an 710049, China
Zongxian Feng: Jinhe Center for Economic Research, Xi’an Jiaotong University, Xi’an 710049, China

Energies, 2025, vol. 18, issue 19, 1-22

Abstract: Given the great proportion of CO 2 emissions from electricity generation in total energy-related CO 2 emissions, this article constructs a tripartite evolutionary game model consisting of vertical governments and power generation groups (PGGs), where the vertical governments include the central government (CG) and local governments (LGs), considering the externalities of different power generation modes on energy security and the environment. This article analyzes the stable strategies of the three players through replicator dynamics equations, draws the evolutionary phase diagrams, and analyzes the asymptotic stability of equilibrium points by using Jacobian matrices. To validate and broaden the results, this article also provides a numerical simulation. This article concludes that (1) a reduction in the supervision, enforcement, or low-carbonization costs of the CG, LGs, or PGGs motivates it or them to choose “supervision”, “enforcement”, or “low-carbonization” strategies; (2) an increase in penalty incomes or expenses encourages the CG or LGs to choose the “supervision” or “enforcement” strategies; (3) a rise in extra tax expenses motivates PGGs to choose the “low-carbonization” strategy; (4) a change in the externalities of energy security or the environment has no impact on the CG’s strategy. The above conclusions offer the CG and LGs with references for making effective low-carbon policies and provide PGGs with references for choosing an appropriate power generation mode.

Keywords: vertical governments; power generation groups; environmental externalities; energy security externalities; evolutionary game (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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