Carbon Emission Governance Between Government and Enterprises in China: An Evolutionary Game-Based Study

The development of a robust and well-designed carbon emission governance framework is critical to achieving effective carbon reduction. To explore carbon reduction and regulation behaviour between governments and enterprises based on government rewards, penalties, regulations, and publicity and disclosure from the media, this study used evolutionary game theory to construct an evolutionary game model. In this model, strong and weak regulation are two strategies that can be selected by the government; truthful reports and underreporting of carbon emissions are two strategies that can be used by enterprises. Hence, we performed theoretical analysis and numerical simulations in this study. The results show that different strategy selections are influenced by an initial payoff matrix and initial parameter selection and construction. Under certain conditions, to impel the government to choose the strong regulation and the enterprises to choose the truthful report strategy, this study suggests decreasing the cost of government regulations and increasing the probability of publicity of the governments’ strong regulation behaviour and the enterprises’ truthful reporting of carbon emissions. Finally, increasing the penalty of the enterprises’ underreporting behaviour and the probability of disclosure on the behaviour of weak regulation and underreporting of carbon emissions.