Using green technology for a better tomorrow: How enterprises and government utilize the carbon trading system and incentive policies

This unique study focuses on how the carbon trading system (CTS), stakeholder concerns and innovation incentive policies all combine to effect enterprises' green technology innovation. Using a three-dimension system, this study includes green output level, green output proportion and green total factor productivity. Utilizing a DID model of an unbalanced panel, we investigate how government and enterprise work together better to achieve carbon emission targets. The main findings are as follows: (1) Enterprises are displaying a high level of concern with envi-ronmental information disclosure and therefore their CTS will have a more significant impact on green technology output and the proportion of this green output. In contrast, government con-cerns about decarbonization with CTS have uncertain effects on the three dimensions of green technology innovation. (2) CTS Fiscal subsidies and R&D funding are strong ways to improve enterprises' green technology output. However, the best way to improve green technology output, green output proportion and green total factor productivity is with tax returns. When tax returns increase 1%, the green output level increases 1.5% under the CTS. (3) This study, utilizing data from the impact of different implementation modes of innovations incentive policies, shows that inclusive innovation policies make CTS's combined effects more significant than differentiated policies.

Automated summary

This study investigates the combined effects of the carbon trading system (CTS), stakeholder concerns, and innovation incentive policies on enterprises' green technology innovation. The findings suggest that enterprises' high level of concern with environmental information disclosure leads to a significant impact of CTS on green technology output and proportion. However, government concerns about decarbonization with CTS have uncertain effects on the dimensions of green technology innovation. It is found that fiscal subsidies and R&D funding under CTS are effective ways to improve enterprises' green technology output, but tax returns are the best way to improve all dimensions of green technology innovation. The study also concludes that inclusive innovation policies have a more significant combined effect of CTS compared to differentiated policies.