Industrial Engineering Journal ›› 2016, Vol. 19 ›› Issue (3): 30-36.

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The Impact of Government Fiscal Behavior on the Manufacturer′s Decision under the Background of Low-carbon

  

  1. School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
  • Online:2016-06-30 Published:2016-08-31

Abstract:

Subsidies and taxation are the common strategies in the practice of carbon emission reduction in China. Based on consumer and producer surplus theory, the objective function of social welfare is established. The four kinds of government subsidies and taxing acts are compared. The impact of government subsidies and taxation on the decision making of carbon products and noncarbon products is analyzed. At the same time, the equilibrium price, equilibrium output, equilibrium profit and social welfare of the two products are analyzed. Studies have indicated that with the government′s intervention in the lowcarbon supply chain, the social welfare will be increased, but that it is better for the government to increase the general welfare of the society by subsidizing low carbon product manufacturers than by only taxing highcarbon product manufacturers and that a comprehensive consideration of taxation and subsidy policy is better than both.

Key words: low carbon economy, consumer utility, government behavior, social welfare