Evolutionary Game Analysis on Production and Emissions Reduction of Manufacturing Enterprises under Different Carbon Policies

Abstract

This paper is to analyze the game behaviors of production and emission reduction between government and manufacturing enterprise under different carbon emission policies. To start with, based on different enterprises' behaviors of production and emission reduction under carbon policies of carbon tax and carbon cap and trade, cost-benefit functions for the enterprise and government are constructed respectively. Through the dynamic replication method, an evolutionary game model between enterprises and the government based on limited rationality is built. After that, the problem how participants' behaviors affect evolutionary stable strategies has been discussed. At last, the game analysis results show that both emission reduction cost of enterprise and government penalties on over emission as well as carbon cap would affect not only the government choice of carbon policy, but also the implementation of enterprises' production and emissions reduction.