Solving carbon tax challenges with a holistic approach: Integrating evolutionary game theory and life cycle energy solutions

Carbon emissions from the combustion of fossil fuels continue to be a significant barrier in the fight against global climate change. Carbon taxes are an energy policy tool for substantially carbon dioxide (CO2) emissions reduction. This paper proposes a new strategy to promote the use of renewable energy by enterprises in industrial parks against the backdrop of a carbon tax. Using an evolutionary game model based on life cycle assessment (LCA), this study investigates the impact of dynamic carbon tax mechanisms, fines, and subsidies on the energy choices of industrial park enterprises. This paper's primary contribution is the incorporation of LCA into the evolutionary game model, which facilitates accurate calculation of the carbon tax parameter value. According to the study's findings, the carbon tax rate increases the propensity of enterprises to acquire a high percentage of renewable energy. While there is a negative relationship between fines and the propensity of enterprises to adopt a low proportion of renewable energy, an increase in subsidies decreases the proportion of enterprises that purchase a high proportion of renewable energy. This paper concludes by providing a theoretical foundation for policymakers to construct precise carbon tax schemes and promote renewable energy consumption among industrial park enterprises while simultaneously reducing carbon emissions.