Enterprises’ decisions on adopting low-carbon technology by considering consumer perception disparity

Abstract

In recent years, developing low-carbon technology has been a critical strategy for enterprises to respond to global warming challenges. Although consumer perception is influential in determining technology adoption, there is a lack of studies looking into the impact of consumer perceptions on enterprises' low-carbon technology adoption behaviors. This paper thus aims to investigate enterprises' decisions on technology adoption by considering the consumer perception disparity. Findings reveal that enterprises' optimal decisions would vary with the consumer perception disparity. When the consumer perception disparity is moderate, the enterprise would not choose to adopt low-carbon technology only. When the consumer perception disparity is either small or large, win-win situations could be achieved to maximize both enterprise profits and the social welfare. However, excessively high environmental costs would compress the win-win areas and severely reduce the total social welfare. The findings also reveal that government subsidies would be helpful in driving enterprises' low-carbon technology adoption behaviors; however, the study identifies three cases when government subsidies are ineffective. Major measures, including developing a flexible government subsidy mechanism by considering consumers’ low-carbon preferences, keeping a reasonable environmental cost, can be taken to effectively promote low-carbon technology adoption. This study provides a new perspective for enterprises to make decisions on low-carbon technology adoption, and provides theoretical evidence for the government to promote the effectiveness of subsidy policies.