How do carbon trading price and carbon tax rate affect power project portfolio investment and carbon emission: An analysis based on uncertainty theory

Differential game analysis of joint emission reduction decisions under mixed carbon policies and CEA

To understand joint emission reduction (JER) of upstream and downstream firms under a low-carbon operational environment, this study incorporates green technology, remanufacturing, low-carbon promotion, consumer environmental awareness (CEA), and mixed carbon policies (carbon tax + cap-and-trade) into a dynamic framework to investigate JER decisions of the upstream manufacturer and the downstream retailer. Applying the differential game theory, we consider low-carbon goodwill as the state variable and explore members' optimal decisions in four cases, namely, idealized case, noncooperative case, unilateral cost-sharing contract (UCSC) case, and bilateral cost-sharing contract (BCSC) case. Our results show that the noncooperative case leads to a loss of efficiency in joint emission reduction. Although the BCSC is more advantageous than the UCSC in improving the efficiency of JER, a profit redistribution mechanism needs to be included, and the profit distribution ratio should be controlled within a certain interval. Only in this situation do both parties prefer the BCSC. Additionally, the impact of mixed carbon policies and CEA on JER decisions, low-carbon goodwill, profits, and coordination are fully discussed, and it is found that in the face of stricter mixed carbon policies, the downstream retailer plays a moderating role only in cooperative cases. Several practical implications are concluded for JER, contract design, CEA, and carbon policies. Governments and firms can benefit from our research by gaining a deeper understanding of JER.

A study on the dynamic impact of carbon emission trading on green and high-quality development

As a pivotal element in market mechanisms, carbon trading is increasingly recognized as crucial for achieving China's Carbon Peaking and Carbon Neutrality Goals. This study introduces a comprehensive dynamic model, integrating carbon trading, emissions, economic growth, and green technology innovation, to offer a holistic understanding of the interplay between these domains. Utilizing principles from nonlinear dynamics and chaos theory, the model is adept at simulating various scenarios and assessing the effectiveness of government policies in stabilizing these complex systems. In-depth analysis provided by this research sheds light on the nuanced impact of carbon trading policies on sustainable development. Key findings highlight (1) Carbon trading's essential role as a catalyst in propelling sustainable and high-quality growth. (2) A strong positive relationship is observed between the sophistication of the carbon trading mechanism and its effectiveness in stimulating green technology innovation and fostering high-quality green development. Notably, carbon trading's influence on green technology innovation markedly enhances the efficacy of carbon emission reduction strategies. (3) Government regulations are instrumental in augmenting carbon prices, thus incentivizing increased corporate participation in emission reduction and enhancing the overall impact of carbon emission reduction. Nevertheless, the study identifies a critical threshold in regulatory intensity, beyond which there is a risk of system destabilization (a 3 ≥ 0.032 ). These findings underscore the imperative for developing an integrated national carbon emission trading market, prioritizing sustainable growth strategies and diligently pursuing China's environmental objectives.

A stochastic dynamic programming model for the optimal policy mix of the carbon tax and decarbonization subsidy

Carbon tax and decarbonization subsidy are an effective policy mix in reducing carbon emissions. However, there is a research gap between the deterministic and static analysis related to carbon reduction policy instruments and the dynamic green transition influenced by stochastic factors. This research investigates the optimal dynamic carbon reduction strategies that develop green technologies, increase abatement inputs, and reduce carbon emissions by applying the stochastic optimal control theory. Firms that are incentivized by decarbonization subsidies and regulated by carbon tax choose optimal closed-loop control strategies of abatement inputs to achieve profit-maximizing objectives with carbon reduction constraints. The explicit solutions of the optimal carbon tax and decarbonization subsidy are provided. The simulation results illustrate that the optimal policy mix is feasible in the effective period when the carbon emission decreases significantly, which indicates that the abatement policy mix can effectively promote carbon reduction. Our results reveal that the dynamic optimal policy mix is conducive to achieving carbon abatement goals with capital uncertainty. The government should implement a dynamic carbon tax and decarbonization subsidy policy mix simultaneously associated with optimal closed-loop carbon reduction strategies. Firms with asymmetric decarbonization efficiency can transfer progressively into a cleaner productive pattern.

Impact of country governance mechanisms on carbon emissions performance of multinational entities

This study investigates the impact of country governance mechanisms on carbon emissions performance of private sector organisations, using empirical evidence from 336 top multinational entities (MNEs) over a 15-year period. The results show that, at the aggregate level, Control of Corruption (b = -0.021, p < 0.01) and Voice & Accountability (b = -0.015, p < 0.05) are significantly and negatively associated with carbon emissions rate. While Political Stability (b = 0.007, p < 0.05) and Government Effectiveness (b = 0.018, p < 0.05) have significant positive impact on carbon emissions rate, the impact of Regulatory Quality and Rule of Law is negative but insignificant. Empirical evidence supports the conclusion that the existing institutional environment is not sufficient to deliver the net zero transition. There is a need for more coordination, strategic planning, and delivery monitoring in government institutions to achieve decarbonisation targets. The study contributes to knowledge within the context of the identified research gaps. First, the study adds to the limited literature on the impact of country governance on carbon emissions reduction, particularly with reference to scope 3 emissions. Second, with the sustainable development goals (SDGs) set to expire by 2030, the study provides empirical evidence on efforts governments of countries are making in achieving decarbonisation targets through improvement in country governance quality. Third, the study shows that the impact of the country governance on the carbon emissions performance of MNEs is contextual and varies across jurisdictions/geographical regions. Finally, the paper contributes to the debate on the actualisation of Agenda 2030, because presenting empirical evidence on the impact of country governance mechanisms on carbon emissions reduction-particularly scope 3 emissions-is an important discourse in the realisation of the SDGs.