Environmental subsidy and the choice of green technology in the presence of green consumers

Bi, Gongbing; Jin, Minyue; Ling, Liuyi; Yang, Feng

doi:10.1007/s10479-016-2106-7

Cited by 105 publications

(55 citation statements)

References 32 publications

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“…The basic model of the study was built considering a specific style of function based on Requate [11]. Krass et al [14] assumed the firm was facing discrete technology choices which had non-zero fixed costs, while Arguedas et al [21] and Bi et al [22] assumed that the cost of reducing environmental pollution was a continuous second-order differentiable function, which meant that a continuous level of investment could be achieved. The current study inherits the assumption of the latter by assuming that the firm incurs only one-time fixed cost which is continuous and ignore its variable operating cost.…”

Section: Literature Reviewmentioning

confidence: 99%

Tax Policy, Environmental Concern and Level of Emission Reduction

et al. 2019

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Regulators often use environmental policy to induce green initiatives by firms. This paper examines the emission-reduction-inducement effect of the environmental tax deduction (ETD) incentive by Stackelberg game models between an environmental regulator and a profit-maximizing monopolistic firm facing emission-dependent demand. Different cases, i.e., with/without considering the regulator’s environmental concerns, were used to investigate the ETD policy effects with a numerical example. This paper shows that the regulator’s tax policy will only affect the emission reduction level, but cannot influence the output, which combined with the firm’s operation factors mainly depends the consumers’ attitude toward green products and price sensitivity. Numerical simulation results showed that for the cases with a moderate level of environmental concern and emission standard, the regulator can set an ETD incentive to motivate the choice of a higher level of emission reduction and simultaneously increase social welfare; otherwise, the increase in environmental quality is at the expense of social welfare. When the market’s environmental consciousness increases, it is easier for the regulator to guide the firm to adopt an ETD solution. Therefore, improving consumers’ awareness of environmental protection is an effective way to promote green investment of firms.

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Section: Literature Reviewmentioning

confidence: 99%

Tax Policy, Environmental Concern and Level of Emission Reduction

et al. 2019

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“…Rhee [3] Consumer heterogeneity Unobservable Two-stage game framework Chen [13] Consumers' preferences Environmental standards Quality-based model Amacher et al [4] Eco-friendly preferences Consumer can observe Three-stage game model firm's investment levels Conrad [5] Environmental awareness Select its product Spatial duopoly model characteristic and then its price Liu et al [6] Environmental awareness Various eco-friendly operation Two-stage Stackelberg models Sheu and Chen [14] Tax and subsidy policies Three-stage game theoretic model Zhang et al [7] Environmental awareness Production capacity constraint Centralised/decentralised models Hafezalkotob [15] Financial intervention Price competition model Guo et al [16] Different subsidy policies Game and optimisation theories Bi et al [17] Environmentally discerning Subsidy policy Stackelberg model Gao and Zheng [18] Environmental awareness Environmental concerns Three-stage Stackelberg model Xu et al [8] Without and with Analytical model consumer heterogeneity Jin et al [19] Carbon tax policy Centralised data envelopment analysis Zhong and Chen [9] Willingness to pay for Behavioural game model the greenness premium Gao et al [20] Environmental awareness Tax deduction incentive Emission-dependent demand Stackelberg game model Yenipazarli [21] Emission tax Environmental R&D incentives Two-stage duopoly model Zhao and Chen [22] Environmental awareness Subsidy mechanism Principal-agent models…”

Section: Consumer Government Firm's Attributes Modelmentioning

confidence: 99%

“…In addition, interesting findings are derived: (i) for a manufacturer with low marginal profit, the government tends to provide high and low subsidy rates under the first and second subsidy policies, respectively; and (iii) the government's subsidy policy selection depends on the sensitivity of consumers to price. Bi et al [17] studied the use of governmental subsidy policy to motivate firms' adoption of green technology when consumers are environmentally discerning. The study investigates two profit-maximising firms with two products that differ only in the manufacturing costs, the selling prices and the amount of pollutant emissions per unit of product.…”

Section: Introductionmentioning

confidence: 99%

Optimising Decarbonisation Investment for Firms towards Environmental Sustainability

Tran

Siebers

2019

Sustainability

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We develop a mixed-integer non-linear programming model for firms' decarbonisation investment decision-making towards a sustainable environment. Our model seeks the optimal investment for a firm to achieve maximum profit under constraints derived from its environmental protection awareness and the government's taxation policy. We use an uncertainty theory to formulate the relationship of a firm's environmental protection awareness and its investment budget levels. Governments' taxation policy is modelled by a step-wise linear function, where reduced carbon dioxide emission can help the firm reduce taxation. A linearisation is proposed to solve the non-linear problem efficiently. A case study for a sector of electronic component manufacturers in Nottingham, the United Kingdom, demonstrates the practical implementation of the proposed model. Several large-sized instances, which were randomly generated, were utilised to evaluate the the efficiency of model in terms of computational time. Our model can be used to explore budget options to obtain higher profits under a particular taxation policy.

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“…Raz and Ovchinnikov (2015) considered how a government could coordinate the pricing and supply of public interest goods through government rebates and subsidies [20]. Bi et al (2016) considered green consumers in the supply chain and investigated the effects of subsidy policy of the government on firm decisions in two different situations [21]. investigated the carbon emissions in a dual channel closed loop supply chain, their research suggested that a government may have to subsidize the e-tailer to maximize the social welfare [22].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Previous studies addressed the effects of subsidy policies of the government using game theory [7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22]. Despite the availability of these studies, only a few published articles explored the efficienci-es of subsidy policies of the government using game theory.…”

Section: Introductionmentioning

confidence: 99%

Analysis of Supply Chain under Different Subsidy Policies of the Government

Guo

et al. 2016

Sustainability

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Abstract:The increasing public attention on green products prompted firms and government to focus on the design and manufacturing of these products. This study focuses on a supply chain system that consists of three members, namely, supplier, manufacturer, and government, and then investigates the effects of government subsidies on social welfare and the profits of supply chain members. We utilize game and optimization theories to calculate and compare the optimal decisions and profits of players in the following scenarios: (i) the government provides a subsidy rate to the cost of manufacturer's greenness efforts (first subsidy policy); and (ii) the government grants a per unit subsidy to the manufacturer for the demand for green product (second subsidy policy). We also derive the necessary condition for the most effective subsidy policy that maximizes expected social welfare and profits. Our analysis derives the following findings: (i) under the first subsidy policy, the government tends to provide high subsidy rate to a manufacturer with low marginal profit; (ii) under the second subsidy policy, the government tends to offer low subsidy to a manufacturer with low marginal profit; and (iii) a government's selection of subsidy policy depends on the sensitivity of consumers to price.

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Environmental subsidy and the choice of green technology in the presence of green consumers

Cited by 105 publications

References 32 publications

Tax Policy, Environmental Concern and Level of Emission Reduction

Tax Policy, Environmental Concern and Level of Emission Reduction

Optimising Decarbonisation Investment for Firms towards Environmental Sustainability

Analysis of Supply Chain under Different Subsidy Policies of the Government

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