Evolutionary game analysis of green technology innovation under the carbon emission trading mechanism

Abstract

The carbon emission trading mechanism is an environmental regulation that has both market and government orientations and has a significant impact on the innovation of green technology and low-carbon development. Based on the evolutionary game theory and considering the strategic choices of different enterprise types in the carbon trading market, a three-party game model, involving enterprise A, the government, and enterprise B, is constructed. Based on data on the carbon emission trading market, data simulation is used to analyze the evolutionary game trajectory of government and enterprise behavior strategies. This study finds that 1) carbon prices, additional green technology innovation benefits, and innovation incentives have a significant impact on corporate strategy choices, as with higher carbon prices, additional benefits, and greater innovation incentives, green technology innovation can compensate for corporate innovation investment enterprises tending to choose innovative strategies; 2) enterprises with different innovation inputs and outputs have different strategic choices under identical conditions, such as small enterprise B having higher input and lower output than large enterprise A, and therefore, when the government encourages policies such as innovation subsidies, it must treat different types of enterprises differently; and 3) the cost of supervision and punishment can help avoid behaviors such as “floating green” and “fraudulent compensation”, but enterprises and the supervision strategy of the government are affected by the associated supervision cost. This study not only further verifies the Porter hypothesis in both theory and practice but also has important implications for corporate green innovation strategies and government regulatory behavior while providing a reference for the carbon emission trading market and corporate low-carbon development.