Designing effective carbon tax policies for low-carbon technology transition: An evolutionary game study on heterogeneous firms

In response to global climate change, the carbon tax has emerged as a pivotal policy instrument for incentivizing low-carbon technology innovation and achieving emission reduction targets. The efficacy of a carbon tax is contingent upon the precision of its design. This study classifies firms into different types based on their green premium and carbon emission factors. Utilizing an evolutionary game-theoretic model, we investigate the impact of varying carbon tax rates on the low-carbon technology innovation strategies adopted by these heterogeneous firms. The main findings of this study are as follows: (1) In the absence of carbon tax policy intervention, firms fail to spontaneously evolve toward low-carbon technology innovation strategies. (2) While the carbon tax policy plays a positive role in promoting low-carbon innovation, its effectiveness varies significantly due to firms' heterogeneity. Specifically, the incentive effect of the carbon tax is rather limited for firms with a low green premium. In contrast, firms characterized by a high green premium demonstrate greater sensitivity to the carbon tax. Notably, for firms with a high green premium and low carbon emission profile, a carbon tax rate exceeding a critical threshold level is required to trigger a strategic shift toward innovation. (3) An optimal range exists for carbon tax intensity. Excessive intervention may reduce system efficiency, while implementing complementary policy measures can help mitigate the limitations inherent in a carbon tax policy.