Effects of a Mixed Emissions Control Policy on the Manufacturer’s Production and Carbon Abatement Investment Decisions

Fei Wang, Dalin Zhang*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

1 Citation (Scopus)
24 Downloads (Pure)

Abstract

Considering the consumers’ environmental awareness, a mixed emissions control policy with carbon tax and a dynamic reward-punishment mechanism for carbon abatements was introduced to explore the manufacturer’s low-carbon production issues. The results showed that: (1) Under a given mixed emissions control policy, a higher government pre-determined abatement target cannot positively encourage manufacturers’ carbon abatement behaviors. However, a stricter emissions control policy is environmentally beneficial only when the government pre-determined abatement target exceeds a certain threshold. (2) Reducing the carbon abatement cost and enhancing the consumers’ environmental awareness would always benefit manufacturers’ low-carbon production, but both approaches benefit the environment only when the government pre-determined abatement target is below a certain threshold. (3) Under a mixed emissions control policy of social welfare maximization, the reward-punishment coefficient positively correlates with the government’s optimal pre-determined abatement target, and the effect of the carbon tax rate on that is closely related to the carbon emissions of the unit product. More importantly, imposing a carbon tax or raising the tax rate and adopting a reward-punishment mechanism or raising the reward-punishment coefficient can effectively encourage manufacturers’ carbon abatement investment behaviors. However, they have nothing but a negative effect on manufacturers’ excessive abatement levels.

Original languageEnglish
Article number13472
JournalInternational Journal of Environmental Research and Public Health
Volume19
Issue number20
ISSN1661-7827
DOIs
Publication statusPublished - 18 Oct 2022

Bibliographical note

Funding Information:
This work was supported by the Fundamental Research Project of the National Tax Institute of State Taxation Administration under Grant 2022QNKT009.

Publisher Copyright:
© 2022 by the authors.

Keywords

  • abatement investment decision
  • carbon tax
  • dynamic reward-punishment mechanism
  • mixed emissions control policy
  • production decision
  • Policy
  • Taxes
  • Investments
  • Government
  • Carbon

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