Green Goodwill and Effectiveness of Carbon Abatement Policies: Static and Dynamic Perspectives

47 Pages Posted: 4 Feb 2025

See all articles by Ally Zhang

Ally Zhang

Lancaster University - Lancaster University Management School; affiliation not provided to SSRN

Xiaoliang Li

Guangzhou College of Technology and Business

Date Written: December 20, 2024

Abstract

This study investigates the effectiveness of carbon abatement policies in a Cournot duopoly framework, incorporating static and dynamic analysis. We evaluate four policy interventions-enhancing consumer green awareness, promoting corporate environmental responsibility, reducing carbon abatement costs, and increasing carbon tax rates-and their effects on firms' environmental, economic, and social performance. A static model reveals equilibrium outcomes driven by consumer preferences for firms' green goodwill, while a dynamic extension, incorporating bounded rationality, explores market stability. Our findings underscore the importance of balancing green innovation incentives with mechanisms to maintain stability, offering insights for effective and sustainable policy design in competitive markets.

Keywords: Green Goodwill, Carbon Emission Abatement, Consumer Green Awareness, Bounded Rationality, Market Stability

Suggested Citation

Zhang, Ally Quan and Zhang, Ally Quan and Li, Xiaoliang, Green Goodwill and Effectiveness of Carbon Abatement Policies: Static and Dynamic Perspectives (December 20, 2024). Available at SSRN: https://ssrn.com/abstract=5065181 or http://dx.doi.org/10.2139/ssrn.5065181

Ally Quan Zhang (Contact Author)

Lancaster University - Lancaster University Management School ( email )

Accounting And Finance,
LUMS,
Bailrigg Lancaster, LA LA1 4YX
United Kingdom

HOME PAGE: http://www.allyquanzhang.com/wordpress/

affiliation not provided to SSRN

Xiaoliang Li

Guangzhou College of Technology and Business

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