Collaborative Emission Reduction in Sustainable Coal-Power Supply Chains Under Carbon Trading: The Role of R&D Subsidies

To address the misaligned emission reduction incentives between upstream and downstream firms in coal-power supply chains under the dual carbon goals, and to promote their low-carbon transition and sustainable development, this study develops a coal supplier-led Stackelberg game model under carbon trading. With electricity output held constant, the model compares four scenarios—no subsidy, supplier-only subsidies, generator-only subsidies, and dual subsidies—and further examines subsidy allocation under a budget constraint. The results show that, under certain conditions, subsidizing one firm improves its technology but discourages technological improvement by the other firm. Consequently, subsidies may need to exceed a threshold to achieve net emission reductions. Contract acceptance conditions and the compatibility of the two technologies can alter these interactions. Appropriately allocated dual subsidies can promote technological improvement by both firms and achieve collaborative emission reductions. Under the baseline parameters and specified subsidy rates, dual subsidies yield the lowest emissions but also require the highest government expenditure. Under a budget constraint, the optimal subsidy allocation depends on the budget size and the emission reduction efficiency of the two firms and may involve supporting either one firm or both. Unspent funds may be retained when further expenditure cannot deliver additional emission reductions. This study reveals how R&D subsidies affect total supply-chain emissions through interactions between the two firms’ technology choices, providing a basis for policies that coordinate firms’ emission reduction incentives, allocate limited subsidy funds effectively, and promote sustainable development in coal-power supply chains.