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Manufacturers’ product line strategies and environmental impacts under carbon cap and trade policies

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Abstract

This paper explores the impact of carbon cap-and-trade policies and consumer low-carbon preferences on the choice of manufacturers’ product lines. We further investigate the optimal decisions of manufacturers under different product line strategies. Moreover, we analyze consumer surplus, environmental impact, and social welfare under different product line strategies. The results show that producing low-carbon and ordinary products is the optimal product line strategy for manufacturers. In addition, we demonstrate that when considering carbon cap-and-trade policies and consumers' low-carbon preferences, the consumer surplus, environmental impact, and social welfare when manufacturers produce low-carbon products are always better than in other scenarios. Furthermore, our research results also show that with the increase of carbon trading prices, the consumer surplus and social welfare when manufacturers choose to produce low-carbon products are always better than in other scenarios. However, we find that the environmental impact is not always outperforming when manufacturers choose a product line that produces low-carbon products than other scenarios.

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Authors and Affiliations

  1. College of Economics and Management, Huazhong Agricultural University, Hubei, 430070, China

    Hua Wang & Lan Wang

  2. College of Urban and Environmental Sciences, Central China Normal University, Hubei, 430070, China

    Qiyan Ding

Authors
  1. Hua Wang
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  2. Lan Wang
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  3. Qiyan Ding
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Contributions

Hua Wang: conceptualization, methodology, software, formal analysis, investigation, writing—original draft. Lan Wang: supervision, conceptualization, methodology, validation, resources—review and editing. Qiyan Ding: conceptualization, methodology, funding acquisition, validation, writing—review and editing. All authors read and approved the final manuscript.

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Correspondence to Qiyan Ding.

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The authors declare no competing interests.

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Communicated by Philippe Garrigues.

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Wang, H., Wang, L. & Ding, Q. Manufacturers’ product line strategies and environmental impacts under carbon cap and trade policies. Environ Sci Pollut Res 29, 40781–40795 (2022). https://doi.org/10.1007/s11356-021-17909-1

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  • DOI: https://doi.org/10.1007/s11356-021-17909-1

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