Manufacturers' decision making on emission reduction based on blockchain technology-analysis under the government's carbon cap-and-trade policy

Abstract

This study examines manufacturers' decisions to reduce carbon emissions under the government's cap-and-trade policy. It analyses the sensitivity of carbon emission reduction rates under different blockchain adoption strategies. In this paper, a game-theoretic model of a manufacturer's production and sale of new and remanufactured products is developed, and study the manufacturer's optimal carbon reduction rate and pricing decisions. This paper also analyses the environmental impact of different blockchain adoption strategies. Finally, this study extends the Model to explore the response of manufacturers when the government adopts the Grandfathering mechanism. This study found that manufacturers' carbon emission reduction rates grow with consumers' low-carbon sensitivity and consumers' recognition of the quality of remanufactured products. The findings further reveal that under moderate blockchain implementation costs, manufacturers adopt blockchain technology not merely for profit enhancement but also to achieve higher carbon emission reduction rates. Furthermore, the analysis demonstrates that manufacturers are unlikely to implement a single-product blockchain adoption strategy. The government can also combine Benchmarking and Grandfathering mechanisms, thus achieving the dual roles of controlling manufacturers and achieving the highest carbon emission reduction rates.