Stochastic Differential Game Model Analysis of Emission-Reduction Technology Under Cost-Sharing Contracts in the Carbon Trading Market

Abstract

Climate change and greenhouse gas emission reduction have become pressing concerns in recent years. Carbon trading systems and emission-reduction cost-sharing contracts are important emissionreduction measures, under the two mechanisms, this paper considers a dynamic emission-reduction technology investment decision-making problem in a dyadic supply chain consisting of a manufacturer and a retailer. In considering the influence of consumers' low-carbon preferences on market demand as well as the impact of uncertainty on carbon emission-reduction behaviour, this paper (1) constructs the investment game model under cost-sharing coordination between manufacturers and retailers; (2) adopts differential game and dynamic optimisation methods to obtained investment strategies for manufacturers and retailers under cost-sharing contracts.; and (3) uses a numerical simulation method to simulate the path evolution process of each state variable and, by analysing the sensitivity of various parameters, to determine the influence of various parameters on the decision making of emission reduction among stakeholders. The study finds that under the carbon trading system, cost-sharing contracts have a regulatory effect on enterprise emission-reduction investment and enterprise profits, and that the impact of regulatory effects increases over time. Likewise, the evolution path of the parameters used for various indicators presents a strengthened trend over time. The results show that it is necessary to enhance the cooperative development and exchange of carbon emission-reduction technology among enterprises.INDEX TERMS carbon emissions trading system, cost-sharing contracts, investment in emission-reduction technology, stochastic differential game

Knowledge Sharing Strategy and Emission Reduction Benefits of Low Carbon Technology Collaborative Innovation in the Green Supply Chain

“…The research results showed that carbon tax can promote LC technology innovation. Hou et al (2020) used the differential game model to explore the dynamic emission reduction technology investment decision-making problem in the binary supply chain composed of manufacturers and retailers. Si et al (2020) established a time-lag differential price game model, and analyzed the equilibrium strategy of price competition between technology supply and demand companies and the local asymptotic stability of the game system at the equilibrium point.…”

Non-Cooperative Game and Cooperative Operation of Multi-Level Supply Chain Under Background of Carbon Emission Reduction

“…Reference [33] contended with the joint emission reduction and pricing decision problems, as well as coordination contract design issue for a class of two-echelon low-carbon supply chain system. The dyadic supply chain system consisting of manufacturer and retailer or production inventory system were discussed, which considered the influence of consumers" low-carbon preferences on random variable demand and the impact of uncertainty on carbon emissionreduction behavior [34]. Through numerical analysis and case study, the validity and feasibility of the viewpoint are verified.…”

“…The manufacturer M also pays attention to the emission reduction investment of supplier S and the promotion of retailer R. In the meantime, it shares a certain proportion of the costs for the upstream and downstream. The construction method refer to the References [20][21][22], [32][33][34]. Therefore, the decisions of three parties are proposed as.…”

Analysis of Carbon Dioxide Emissions From Road Transport Using Taxi Trips

“…Many studies have focused on the mitigation potential of CO2 emissions from transport sector [18,19,20,21,22]. Most of these studies are concerned with traditional decoupling analysis of CO2 emissions from the transport sector.…”