Research on Carbon Emissions Reduction Strategy Considering Government Subsidy and Free Riding Behavior

Abstract

Government subsidy can greatly encourage supply chain enterprises to reduce carbon emissions. To quickly occupy the market, supply chain enterprises form alliances. However, enterprises in the alliance have speculative psychology, and the impact of such free riding behavior on the carbon emissions reduction willingness of supply chain enterprises is still unclear. In this article, government subsidies and free riding behavior parameters are introduced to build a carbon emissions reduction decision model for the government, manufacturers, and suppliers, and the impact of government subsidies and free riding behavior on the decision making of supply chain enterprises is analyzed through evolutionary game theory. The analysis shows that government subsidies have an incentive effect on carbon emissions reduction of supply chain enterprises. After the market stabilizes, even if the government subsidies are gradually withdrawn, the carbon emissions reduction of supply chain enterprises still converges to Pareto optimal equilibrium. The influence of free riding behavior on supply chain enterprises depends on the carbon emissions reduction profit. When the carbon emissions reduction profit is different, the decision of manufacturers and suppliers will be different. The above conclusions provide a reference for governments to strengthen control or enterprises to make decisions on carbon emissions reduction.

Implementation effectiveness evaluation of watershed ecological compensation policy for sustainability based on the Huai river Basin in China

“…The "free-riding" phenomenon is when an activity generates externalities. Externalities are non-market effects caused by the economic activities of an entity on others and society (Gui et al, 2022). In WEC, the "free-riding" phenomenon specifically refers to upstream cities sacrificing the environment for economic development, resulting in river pollution that affects the ecological environment of downstream cities without incurring any costs.…”

Sustainable strategies for green supply chain within the platform economy consider subsidies and marketing efforts

“…Zhang et al [ 29 ] based on the numerical simulation and coefficient sensitivity analysis, conclusion that the improvement of public awareness of environmental protection, government subsidies also increase, Meng et al [ 30 ] use the research method of Stackelberg game theory to conclusion the government subsidies can reduce the price of green products to a certain extent and effectively promote the sale of green products, In addition, Sajid et al [ 31 ] through the principal axis factor extraction and regression analysis suggests that the government should provide monetary incentives to enterprises to reduce green logistics costs. Gui et al [ 32 ] through evolutionary game theory, government subsidies can encourage supply chain enterprises to reduce carbon emissions. However, subsidies do not always bring benefits, Feng et al [ 11 ] said that subsidies in the remanufacturing mode are ineffective when remanufacturing costs are low, and higher subsidy rates do not always benefit the environment, social welfare and social surplus [ 33 ] at the same time.…”

“…Chen et al [ 10 ] present a three-player game that studied unit production subsidies and innovation efforts subsidies and said that the government should not use these two subsidies for product research and development efforts to reduce costs, Wu et al [ 6 ] studied the carbon trading mechanism under subsidies and the interaction strategy between the government and supply chain enterprises, and finds that in the case of no cost-sharing, the type of decision-making between enterprises has no impact on the level of low-carbon technological innovation and subsidies. [ 32 , 34 , 35 ] through establishing the Stackelberg game analysis framework, design of different scenarios, study of different government subsidy strategies and the impact of government subsidies on the green supply chain.…”

“…and effectively promote the sale of green products, In addition, Sajid et al [31] through the principal axis factor extraction and regression analysis suggests that the government should provide monetary incentives to enterprises to reduce green logistics costs. Gui et al [32] through evolutionary game theory, government subsidies can encourage supply chain enterprises to reduce carbon emissions. However, subsidies do not always bring benefits, Feng et al [11] said that subsidies in the remanufacturing mode are ineffective when remanufacturing costs are low, and higher subsidy rates do not always benefit the environment, social welfare and social surplus [33] at the same time.…”

Does the carbon trading mechanism affect social and environmental benefits of the retailer-led supply chain: Strategic decisions of emissions reduction and promotion

“…However, each stakeholder is not concerned about the entire supply chain's profits; they only act for their own maximized profits. When one enterprise makes efforts to reduce emissions or promote green/sustainable products, other companies will take a free ride to the benefit from the spillover that emerges (Gui et al, 2022). The one who invests in eco-friendly actions will feel unfair.…”