In this paper, a dynamic game model of duopoly firms between the traditional electric power enterprises and new energy enterprises was established for analyzing the behaviors of electric power enterprises under different government carbon taxes policies and the corresponding Nash equilibrium. This goal of the model was set to maximize the total social welfare while considering the economic, social and environmental benefit. This model was further used to calculate the optimal carbon tax rate and optimal government subsidy level for both traditional electric power enterprises and new energy enterprises. The results showed that a reasonable carbon tax rate and return mode can optimize the structure of Chinese power industry, encouraging the high-carbon enterprises to reduce emission, promote the development of low carbon enterprises, and reduce the overall carbon dioxide emission from the power industry.
Qi, Tang and Lv, Xuhu, "Analysis of Enterprise Behavior Game under the Condition of Carbon Taxes and New Energy Subsidies" (2017). WHICEB 2017 Proceedings. 23.