Impact of Cap-and-Trade Mechanism on Low-Carbon Technology Investment of Electricity Supply Chain Enterprises Under Local Protectionism

Purpose/Significance Under the background of local protectionism, this paper studies the influence of different cap-and-trade mechanisms on low-carbon technology investment, in order to identify the boundary of low-carbon technology investment by electricity supply chain enterprises. Design/Methodology A two-level electricity supply chain composed of electricity generator and electricity retailer is constructed. The equilibrium solutions under different models are obtained by backward induction, and the sensitivity and comparative analysis of the equilibrium solutions are carried out. Conclusions/Findings When the unit carbon quota is large, the low-carbon investment level, wholesale electricity price, profits of electricity retailer and foreign electricity generator under the benchmark mechanism are all larger than these under the grandfather mechanism; the profits of local electricity generator under local protection are greater than those of foreign electricity generator under the benchmark mechanism and grandfather mechanism. In addition, the electricity demand, wholesale electricity price, profits of electricity retailer and foreign electricity generator decrease with the local protection, unit carbon emissions and cost coefficient under the cap-and-trade mechanism.