Incentive strategies for energy projects considering carbon emission reduction: a differential game perspective

The carbon emissions of energy projects along the Belt and Road Initiative are a critical concern for both investors and host countries. To investigate the incentive strategies of host country governments and social organizations for these energy enterprises, this paper introduces a differential game model and proposes three long-term dynamic incentive strategies: unilateral reward and punishment strategies, joint reward and punishment strategies, and cost-sharing strategies. The research demonstrates that, when selecting strategies to enhance reputation of energy enterprises and carbon reduction, the host country government’s unilateral reward and punishment strategy should be prioritized. For maximizing the benefits of all three parties, the unilateral incentive strategy, particularly the host country government’s unilateral reward and punishment policy, is recommended. The efforts of host country governments, energy enterprises, and social organizations to fulfill their energy-saving and emission-reducing obligations are positively correlated with their marginal benefits. Increasing the marginal benefits for energy enterprises can enhance their motivation for emission reduction. Furthermore, enhancing the intensity of emission reduction obligations for energy enterprises, increasing market demand for a low-carbon environment, and implementing measures to control the natural decay rate of carbon emissions can lead to more significant long-term emission reduction effects and greater environmental benefits.