Product line strategy and environmental impact oriented to carbon tax constraints

Abstract

Under the constraints of the government's carbon tax policy, manufacturers have to consider whether to develop low-carbon product lines or adjust their existing product lines to promote carbon reduction. Therefore, we construct three models to explore the impact of consumer product acceptance on manufacturers' product line strategies under the carbon tax policy. Furthermore, we also investigate the social welfare and environmental impacts of manufacturers' different product line strategies. We find that manufacturers prefer to produce both low-carbon and ordinary products, but they may have worse negative impacts on the environment. We show that social welfare is not always better when manufacturers produce low-carbon products than ordinary products. Interestingly, we find that when carbon taxes are higher, it may be more profitable for manufacturers to produce ordinary products than low-carbon products and that manufacturers producing low-carbon products may lead to worse environmental impacts.