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Optimal Coordination Strategy of Regional Vertical Emission Abatement Collaboration in a Low-Carbon Environment

Daming You (), Ke Jiang () and Zhendong Li ()
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Daming You: School of Business, Central South University, Changsha 410083, China
Ke Jiang: School of Business, Central South University, Changsha 410083, China
Zhendong Li: Manchester Institute of Innovation Research, Alliance Manchester Business School, The University of Manchester, Manchester M13 9PL, UK

Sustainability, 2018, vol. 10, issue 2, 1-18

Abstract: This study introduces a time factor into a low-carbon context, and supposes the contamination control state of local government and the ability of polluting enterprise to abate emissions as linear increasing functions in a regional low-carbon emission abatement cooperation chain. The local government effectuates and upholds the low-carbon development within the jurisdiction that is primarily seeking to transform regional economic development modes, while the polluting enterprise abates the amounts of emitted carbon in the entire period of product through simplifying production, facilitating decontamination, and adopting production technology, thus leading to less contamination. On that basis, we infer that the coordinated joint carbon reduction model and two decentralization contracts expound the dynamic coordination strategy for a regional cooperation chain in terms of vertical carbon abatement. Furthermore, feedback equilibrium strategies that are concerned with several diverse conditions are compared and analyzed. The main results show that a collaborative centralized contract is able to promote the regional low-carbon cooperation chain in order to achieve a win–win situation in both economic and environmental performance. Additionally, the optimal profits of the entire regional low-carbon cooperation channel under an integration scenario evidently outstrip that of two non-collaborative decentralization schemes. Eventually, the validity of the conclusions is verified with a case description and numerical simulation, and the sensitivity of the relevant parameters is analyzed in order to lay a theoretical foundation and thus facilitate the sustainable development of a regional low-carbon environment.

Keywords: optimal cooperation strategy; cost sharing; emission abatement subsidies; differential game; regional low-carbon development (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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