Cooperative carbon emission reduction through the Belt and Road Initiative

Abstract

Carbon emission reduction under the Belt and Road Initiative has great significance on China’s goal of carbon peak. To better promote carbon emission reduction, based on the background of the Belt and Road Initiative, this paper analyzes the collaborative carbon emission reduction through investment between Chinese enterprises and local enterprises in developing countries along the Belt and Road Initiative. Considering the efforts of enterprises in carbon reduction, low-carbon infrastructure investment, and promotion of low-carbon products, this paper constructs a differential game model of collaborative carbon reduction cooperation between Chinese enterprises and local enterprises in developing countries along the Belt and Road Initiative. By horizontally comparing Nash non-cooperative mode, Stackelberg master-slave mode, and cooperative mode, the results shows that Chinese enterprises can encourage local enterprises in developing countries along the Belt and Road Initiative to coordinate carbon emission reduction through subsidies, which is Stackelberg master-slave mode. Under the cooperative mode, with the maximum carbon emission reduction efforts of both parties, the total benefit of carbon emission reduction reaches the optimal Pareto equilibrium. In addition, this paper also discusses the influence of related factors on the benefits of carbon emission reduction.

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