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This paper investigates how upstream and downstream enterprises choose emission reduction strategy while
they are facing environmental regulation, but also analyses their profits and reduction efficiencies in three typical situations.
It can be obtained that in full-cooperation case, both their profit and reduction efficiency are optimal. Meanwhile,
the relationship between reduction and carbon price can also be analyzed, which allows for externality and different
carbon quota allocations. In brief, it can provide a theoretical basis for enterprise to make a wise strategy on emission reduction.