Dynamic Analysis and Simulation of the Feasibility and Stability of Innovative Carbon Emission Reduction Projects Entering the Carbon-Trading Market

Abstract

Designing green agricultural production projects as CER projects is attractive, as it can play a role in promoting the spread of green production technologies and reducing carbon emissions based on market-based compensation. This research constructed a generic analytical framework using evolutionary game methods to evaluate the feasibility and stability of innovative CER projects by numerical analysis or simulation. Finally, two complex scenarios were analysed using simulations based on the framework. The simulation analysis results show that when the profits of VER and CER projects are close, the government’s direct intervention will lead to instability in market development, and the development of VER projects should be focused on. Government subsidies to promote the agricultural sector to participate in CER construction can be gradually reduced with the development of the market. When the reduction speed is slow enough, the effectiveness of subsidies will not be affected. The framework will be helpful to evaluate the feasibility and effectiveness of CER mechanism innovation and development, and to formulate more targeted policies to promote the popularization of green agricultural production technologies.