Evolutionary game analysis between local governments and power generation enterprises based on carbon trading mechanism

Based on evolutionary game theory, a game model between local governments and power generation enterprises was constructed, and then the dynamic stability and evolution trend were analyzed. The analysis result suggests that there exist some different equilibria in the evolution of the game system when the expected profits of enterprises are changing. Accordingly, local governments need to take some measures, for example, strengthening incentives to enterprises who actively abide by emission reduction polices, increasing carbon trading prices appropriately, reducing the variance of cost when local governments choose strict regulation or loose regulation, and strengthening public supervision of the governments, so as to urge the power generation enterprises to consciously reduce carbon emissions, thus achieving control over the overall carbon emissions.