Amid growing concerns about greenwashing, governments are promoting blockchain to enhance emission reduction data transparency and enable manufacturers to access carbon credit markets. However, high implementation costs and data privacy risks have made manufacturers hesitant to adopt this technology. This study analyzes the impacts of greenwashing and blockchain adoption on manufacturers’ production quantity and emission reduction decisions. It further derives the equilibrium blockchain adoption strategies for two competing green manufacturers under greenwashing temptation. Our key findings are as follows. First, counterintuitively, greenwashing forces manufacturers to increase emission reduction levels in the absence of blockchain. This effect reverses completely once blockchain is adopted. Most importantly, manufacturers facing more severe greenwashing risks are actually less likely to adopt blockchain, a finding that challenges the common perception that blockchain is a universal solution to greenwashing. Second, blockchain adoption consistently motivates manufacturers to set higher emission reduction levels, while it increases production quantity and pricing only when the adoption cost is sufficiently high. Third, when the emission reduction cost coefficient is high and blockchain adoption revenue is low, single-firm adoption cannot be an equilibrium strategy. Additionally, we examine the impacts of information asymmetry and power structure on these decisions in extended models.
Hu et al. (Tue,) studied this question.