Supply Chain Strategy Analysis of Low Carbon Subsidy Policies Based on Carbon Trading

Yinjie Zhang, Chunxiang Guo and Liangcheng Wang
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Yinjie Zhang: Business School, Sichuan University, Chengdu 610065, China
Chunxiang Guo: Business School, Sichuan University, Chengdu 610065, China
Liangcheng Wang: Business School, Sichuan University, Chengdu 610065, China

Sustainability, 2020, vol. 12, issue 9, 1-20

Abstract: The low-carbon economy has become the focus of global attention and scientific measurement standards with the concepts of low energy consumption, low pollution, and sustainable development. More and more attentions are paid to the research of low-carbon supply chains. Based on a two-level low-carbon supply chain in the context of carbon trading, a Stackelberg game model was established for government subsidies to determine a coordinated and balanced solution for supply chains in situations dominated by manufacturers. The optimal strategies for low-carbon technology innovation are analyzed within the context of governmental subsidies. This study’s conclusions are as follows: (1) When government subsidies are in place, regardless of who the government subsidies are meant for, manufacturers and retailers that do not generate carbon emissions will transfer the subsidies to the companies that generate carbon emissions by adjusting wholesale prices and retail prices to maximize their own profits. (2) When consumer prices are sensitive, the government’s optimal subsidy intensity increases as consumers’ low-carbon preferences increase. When consumer prices are not sensitive, the government should not provide any subsidies. (3) When consumers’ low-carbon preferences are weak, the retail price of products will decrease with the increase in subsidies; when consumers’ low-carbon preferences are strong, the opposite dynamic occurs.

Keywords: carbon trading policy; low-carbon subsidy policy; carbon reduction technology; Stackelberg game (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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