Abstract: Aiming at the decision-making of enterprises and governments in the mixed duopoly market considering carbon emission, three models, namely Cournot competitive game model, Bertrand competitive game model, and cooperative game model, are respectively constructed to study the game between private enterprises and partially privatized public enterprises. Under these three conditions, a comparative study is conducted on the optimal emission reduction amount and corresponding enterprise production decision, the optimal carbon tax rate and subsidy rate decision of the government, the target profit of the two enterprises, and the total social welfare and environmental pollution. Also, the influence of privatization level of the public enterprise on the optimal emission reduction, carbon tax rate and subsidy rate are discussed. Results show that: when cooperating, the two enterprises have the greatest intensity of emission reduction; while under competition condition, the improvement of public enterprises privatization level will promote the emission reduction of the whole industry. In the case of either competition or cooperation, with the improvement of privatization level of public enterprises, government emission reduction measures should be changed from carbon tax to carbon emission reduction subsidy.

Key words: carbon tax, carbon subsidies, mixed duopoly market, competition and cooperation, privatization level