Evolution of blue carbon trading of China's marine ranching under the blue carbon special subsidy mechanism

Abstract

The carbon sequestration function of marine ranching (MR) is an important part of the carbon cycle. China carrying out blue carbon trading (BCT) of MR will improve the carbon trading mechanism, protect the blue carbon ecosystem, and promote the realization of carbon neutrality. We construct an evolutionary game model comprising three players interacting under a mixed carbon policy, namely the Chinese local government, MR, and firms that demand blue carbon. We analyze four possible stable points and numerically simulate the main parameters such as the subsidy intensity, blue carbon price, and carbon tax standard, and discuss the evolution path of each player under the blue carbon special subsidy mechanism. We find that the local government providing special subsidies for BCT is essential for building a blue carbon market. Differentiated subsidies and taxes can be implemented for different types of MR to strengthen the carbon sequestration enthusiasm of MR. In the initial stage of BCT, the subsidized blue carbon price should be lower than the carbon tax standard; after building the blue carbon market, the subsidized blue carbon price can be adjusted to be the same as the carbon tax standard. Moreover, it is necessary to research and develop supporting management and monitoring facilities for MR to maintain the blue carbon ecosystem's stability and avoid the positive feedback effect of the carbon cycle.