Government And Enterprise Incentive Mechanism Of Reducing Emissions Research In Carbon Trading Market

The establishment of carbon emissions trading market is considered to be the most effective policy tool to cope with the growing global climate and hazy weather. In September 2015, China and America issued "The joint statement on climate change", China promised to begin the national carbon emissions trading system in 2017. In this paper, we study how the government by subsidies, supervision and rated emission reductions to improve the interest of the enterprises to reduce emissions under the carbon trading market. This paper discusses emissions control effect of the government and enterprise efforts in three cases: No subsidies and supervision, information asymmetric and information asymmetry between government and the enterprise. We Integrated use of game theory, principal-agent theory and optimization theory, combining with methods of model analysis, chart analysis, study the issue of the government’s reduction of enterprise incentive mechanism.Firstly, we build the incentive game model of environment government and enterprise in carbon trading market. Considering the attribute of carbon emissions trading in the model, we discussed the optimal results with no subsidies and supervise. And we focus on the integrated use of government supervision, subsidies to supervise and incentive to reduce emissions. Comparing to two kinds of circumstances, we explore the prerequisite of subsidies and supervision, and analyze the function of the means of subsidies, supervision and rated emission reductions. Secondly, we analysis the case of information asymmetry between the government and enterprise. The efforts of enterprise is private information. Considering supervision and subsidy, We use the principal-agent model and linear contract between the government and enterprises. We build the model and solve it. We discuss the control effect of subsidies and supervision. Then we use a numerical example to further study enterprise’s operation cost reduction coefficient, reduction coefficient and find this mechanism is effective. Finally, we give some suggestions for the government set up effective incentive mechanism of carbon emissions trading market. And some advices are given to the enterprise about production operation and relevant efforts decision-making Suggestions and countermeasures are put forward in the carbon market.