Which Is the Best Supply Chain Policy: Carbon Tax, or a Low-Carbon Subsidy?

The low-carbon supply chain is key to promoting sustainable development and solving environmental pollution. Government policies related lowering carbon emissions deeply affect chains. This paper builds a decision-making model under three different regulatory policies: pure tax, subsidy, mixed policy with both tax then compares analyzes the impacts of these on emissions, manufacturer retailer income, marginal profit in order determine best course action respect decision-making. Our results indicate that subsidy unique Nash equilibrium solution between rate manufacturing reduction non-cooperative game. Although beneficial ecological environment, income increases slightly as coefficient before declining rapidly. Manufacturer has negative linear relationship an excessive amount burden companies. Therefore, government must establish reasonable standards for collection while offering moderate subsidies at same time means optimizing social welfare.