Enabling enterprise coordination without fiscal burden: New policy pathways for coal waste management

Abstract

Coal-fired power plants generate substantial waste that requires green pretreatment before valorization, yet high costs and demand uncertainty discourage investment. Although government subsidies are often advocated to promote waste management, this study focuses on an implementable, enterprise-led alternative: recycler-provided pretreatment cost sharing as a contract-based mechanism within the supply chain, alongside recycler-to-plant demand information sharing. Using a game-theoretic model with demand uncertainty and quality differentiation, we compare equilibrium outcomes under four coordination regimes: no cooperation, information sharing only, subsidization only, and a combined mechanism. Results show that information transparency robustly improves coordination by enabling state-contingent pretreatment decisions and sustaining mutual profitability across diverse market conditions. Subsidization increases pretreatment by relieving the plant’s effective cost burden, but its attractiveness to the recycler is limited by direct payment costs, implying that cost-sharing requires targeted, performance-linked design. Combining the two instruments can strengthen outcomes under uncertainty but often provides limited incremental benefits beyond transparency. Policy implications emphasize prioritizing transparency infrastructure, standardized disclosure, and data governance as a baseline, while facilitating subsidy-like cost sharing selectively in contexts where quality premia and uncertainty make cost relief more likely to generate shared gains.