Carbon footprint reduction allocations with dual-heterogeneity consumers
研究在限额与交易政策下，面对环保与非环保两类消费者，企业如何选择减排投资或购买碳抵消来降低产品碳足迹，并发现企业应同时使用两种策略，且减排强度始终为正。
Our study explores a firm that reduces its carbon footprint of products in the presence of heterogeneous consumers under cap-and-trade policy. The market comprises two consumer segments, namely eco-conscious and non-eco-conscious consumers. The former considers the product’s carbon footprint when making purchasing decisions, while the latter does not. Additionally, each consumer segment exhibits heterogeneous product valuations, so the market is dual-heterogeneous. Under the cap-and-trade policy, the firm reduces its carbon footprint using two strategies. It invests in emission-reduction investment (ERI) or purchases carbon offsets (CO) in the carbon market to satisfy its emissions quota. Our findings show that the firm should not always use just one of these emission-reduction strategies but can use them simultaneously. Our findings also reveal that, regardless of whether consumer valuation and environmental preference are negatively or positively correlated, the firm adopts the ERI strategy when the initial emissions intensity per product is low. When the initial emissions intensity per product is high, the firm also chooses the ERI strategy if the gap between the initial emissions intensity per product and the per-unit quota of carbon emissions is small. However, if this gap is large, the firm may choose either the CO strategy or the ERI strategy. Our results further indicate that the firm’s equilibrium profit first decreases and then increases as the ERI cost coefficient (i.e., emission-reduction investment cost coefficient in low-carbon technology) increases, which is not entirely consistent with the intuition that the firm’s profit decreases as its corresponding cost increases. Conventional wisdom suggests that the firm should not invest in advanced technology to reduce carbon emissions when all targeted consumers are non-eco-conscious. However, our findings indicate that the firm’s equilibrium emission-reduction intensity consistently remains above zero.