Agricultural manufacturers’ carbon abatement oriented to government subsidy and sales efforts

Hua Wang () and Cuicui Wang ()
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Hua Wang: Huazhong Agricultural University
Cuicui Wang: Yantai University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 2, No 61, 4335-4363

Abstract: Abstract Agricultural manufacturers (abbreviation: Manufacturers) are conventionally committed to carbon emission reductions under government subsidies to achieve carbon neutrality goals, such as manufacturer subsidies and consumer subsidies. In addition, with the increase in consumers' low-carbon preferences, a growing number of retailers exert sales efforts to promote carbon emission reduction. In this paper, we apply a game theory approach and focus on investigating how sales effort and different government subsidies promote manufacturers' carbon emission reductions. We draw several important conclusions: First, we find that government subsidies are not always conducive to promoting carbon emissions reductions. Second, we show that consumer subsidies impose a higher (lower) financial burden on the government than manufacturer subsidies when carbon abatement costs are above (below) a threshold. Furthermore, retailers are preferable to impose sales effort under consumer subsidies when the cost of sales effort is higher. Third, the results suggest that manufacturer subsidies are more conducive to maximizing social welfare when consumer low-carbon preferences are small in the presence of retailer-imposed sales effort. Something counterintuitive is that we find that social welfare is more likely to be optimal without government subsidies as consumer low-carbon preferences increase.

Keywords: Carbon abatement; Consumer preference; Social welfare; Government policy; Game theory (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-022-02886-3

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