A tripartite evolutionary game behavior analysis of the implementation strategy of the internal carbon pricing of enterprises under governments supervision

Abstract

Internal Carbon Pricing (ICP) represents an innovative approach to carbon emission reduction. The implementation of the ICP involves enterprises and internal organizations, with its outcomes closely tied to government actions. In this study, a tripartite evolutionary game model comprising these subjects was constructed, and subsequent simulation analyses were conducted. The results revealed the following key findings: (1) When the combined total of carbon fees and governments' emission reduction subsidies surpasses the aggregate of carbon fees returned to internal organizations and ICP implementation costs, and when enterprises' revenues exceed governments' subsidies, all three parties will evolve towards ESS (1,1,1). This signifies that enterprises opt for the ICP, internal organizations actively reduce emissions, and governments engage in proactive regulation. (2) Reducing the cost of implementing ICP, increasing the carbon fee rebate ratio, raising governments' subsidies, and elevating the internal carbon price all contribute to promoting the attainment of the evolutionary game results ESS (1,1,1). However, it's important to note that higher governments' subsidies and carbon fee rebate ratios do not necessarily lead to a greater incentive for the three parties to reach the ESS(1,1,1). These findings provide a solid theoretical foundation for enterprises considering the implementation of the ICP in the future.

Keywords

• Internal carbon pricing
• Carbon emission reduction
• Low-carbon economy
• Three-party evolutionary game
• Government supervision