Exploring the dynamics of low-carbon technology diffusion among enterprises: An evolutionary game model on a two-level heterogeneous social network

Abstract For mitigating carbon emissions, series of policies have been formulated by governments to promote the diffusion of low-carbon technologies (LCTs). Enterprises' strategic choices and consumers' decisions have a pivotal impact on LCT diffusion. In this context, this study builds an evolutionary game model based on a social network comprised of two sub-networks with different typologies, which respectively depict the connections of enterprises and consumers. Enterprises choose to produce either low-carbon or un-low-carbon products according to the evolutionary game theory. Consumers purchase preferable products repeatedly according to their demands. Using the model, this research explores the impacts of carbon taxes, subsidies, and the demand for low-carbon products. The results show that carbon taxes have increasing marginal effectiveness in promoting LCT diffusion; high carbon taxes can mitigate the fluctuations of LCT diffusion caused by consumers' repeat purchases; while using the data from the electric vehicle industry, enterprises do not manifest high sensitivity to mild carbon taxation. Different from taxation, the effectiveness of subsidization diminishes and results in inefficiency. A large demand for low-carbon products can prominently stimulate enterprises to adopt LCTs. However, if demand increases from a low level, the fluctuation of LCT diffusion is magnified. This magnification does not last if demand continues to increase.