Co-evolutionary game of manufacturers’ abatement behavior under carbon tax-subsidy policy

Abstract In the context of carbon tax-subsidy policy, our paper develops the models of the tripartite evolutionary game between consumers, manufacturers and local governments and analyzes the impacts of carbon tax-subsidy policy on the strategies of consumers, manufacturers and local governments. Through the construction of replicated dynamic equations, we get the evolutionary stable strategy. Then, the numerical analysis is performed with system dynamics simulation. The results show that (i) the local governments should strengthen the consumers’ awareness of environmental protection through higher financial subsidies, (ii) the taxation intensity coefficient accelerates the dynamic system to evolve into a stable state and (iii) an appropriate punishment by the government accelerates the dynamic system to evolve into a stable state. Our research is expected to provide a reference for local governments to implement effective carbon tax-subsidy policy on manufacturers.