Research on different modes of energy conservation and emission reduction: A differential game model based on carbon trading perspective

Abstract

In recent years, due to global climate change, increasing resource scarcity, and environmental constraints, countries have prioritized energy conservation and emissions reduction. However, enterprises are primarily responsible for energy saving and emissions reduction. To encourage industrial enterprises to engage in energy conservation and emissions reduction, high-carbon enterprises must purchase carbon emission rights from low-carbon counterparts. Common modes of energy conservation and emission reduction of industrial enterprises include reducing production scale, improving energy utilization efficiency, and expanding renewable energy. This article constructs three differential game models to identify the applicable scope of various energy conservation and emission reduction strategies, comparing and analyzing the equilibrium results. The study concludes that when the cost of changing the production mode and the income obtained from the production of unit product is large, the low-carbon enterprise can obtain the maximum benefit by reducing the production scale mode. Otherwise, low carbon enterprises can be maximized through improving energy efficiency mode. For both low-carbon and high-carbon enterprises, reducing production scale is the fastest way to enhance efficiency when the costs of energy conservation and emission reduction are substantial.