Governments worldwide are intensifying their efforts to combat climate change by incentivizing businesses to invest in low-carbon technologies (LCT). In a groundbreaking study, researchers have unveiled the intricate dynamics through which varying subsidy policies impact enterprise behavior, especially when coupled with emerging technologies like blockchain. This research elucidates the complex interplay between technology investments, consumer trust, and subsidy structures, offering profound insights into how best to accelerate the low-carbon transition in supply chains.
At the heart of the study lies a comparative analysis of two predominant subsidy policies: the Traditional Subsidy Policy (TSP) and the Output Subsidy Policy (OSP). These policy frameworks differ fundamentally in their approach—TSP provides subsidies tied directly to emission reduction rates, whereas OSP allocates subsidies based on the volume of low-carbon products produced. The nuanced differences between these models lead to vastly different strategic responses from manufacturers and retailers. Crucially, the integration of blockchain technology (BT) into the supply chain ecosystem emerges as a pivotal factor that reshapes incentives and market dynamics.
Delving into the mechanics, the research demonstrates that an increase in the investment cost coefficient for low-carbon technologies invariably dampens enterprise enthusiasm for emission reduction. This is manifested through reduced carbon emission reduction (CER) rates, declining customer demand, and diminished profitability for both manufacturers and retailers. Simply put, when investing in green technologies becomes more expensive or less efficient, enterprises tend to back away, highlighting the imperative of reducing technological costs or enhancing efficiency to maintain momentum in green innovation.
In stark contrast, the role of consumer preferences emerges as an equally powerful driver. As consumers increasingly prefer eco-friendly products—a phenomenon captured by a rising low-carbon preference coefficient—manufacturers respond by amplifying their investment in emission-reduction technologies. The result is a positive feedback loop where enhanced consumer demand justifies higher wholesale and retail pricing, enabling firms to recuperate their investments and generate profits. This mechanism not only fuels technological adoption but reinforces the commercial viability of low-carbon products within competitive markets.
A particularly profound insight from the research is the critical role played by green trust—consumers’ confidence in manufacturers’ environmental claims. Green trust, amplified through blockchain-enabled transparency, boosts demand and encourages firms to intensify their efforts in carbon reduction. Blockchain technology ensures that product environmental information is immutable and publicly accessible, eliminating skepticism about green claims. In markets enriched by such transparency, companies are more willing to bear the costs associated with cutting emissions, knowing that consumers will reward them with increased purchases.
The study’s sensitivity analyses reveal multifaceted impacts of these parameters on supply chain economics. For instance, a higher green trust factor raises both wholesale and retail prices in addition to profit margins, making the case for governments to facilitate trustworthy certification mechanisms and public awareness campaigns. Programs like the prestigious “Energy Star” initiative illustrate how verified labels can stimulate consumer confidence, encouraging broader adoption of energy-efficient and green products.
Comparisons between TSP and OSP models under different scenarios deliver nuanced perspectives on policy efficacy. Without blockchain technology, TSP tends to foster higher carbon reduction rates when government subsidies per unit are modest. Here, manufacturers receive direct incentives proportional to their emission cuts, motivating technology upgrades. However, when subsidies increase beyond a certain threshold, OSP emerges as superior because it rewards output volume, thereby stimulating greater production and market expansion.
When evaluating wholesale and retail prices in the absence of blockchain, TSP leads to higher pricing than OSP due to its direct link with CER rates. Conversely, under OSP, manufacturers strategically lower prices to boost demand and overall subsidy accumulation. This price dynamic has significant repercussions for consumer accessibility and market growth in low-carbon products. The study cites real-world examples, such as BMW’s strategic subsidies in advanced battery management and intelligent driving systems, which enable premium pricing due to the high value of such technologies.
Introducing blockchain technology into this matrix further transforms outcomes. BT maximizes green trust by ensuring absolute transparency, meaning that consumers no longer need to rely on indirect claims or marketing promises. This reshaping of trust dynamics engenders even stronger incentives among manufacturers to invest in low-carbon technologies. Price structures also adjust accordingly; BT enables manufacturers to pass increased investment costs to consumers more confidently, resulting in higher wholesale and retail prices that the market tolerates because of enhanced trust.
A recurrent theme in the results is the existence of threshold subsidy levels—a precise value below or above which one subsidy policy outperforms the other in promoting carbon reduction, demand, and profitability. Notably, these thresholds depend on several factors including initial production costs, green technology investment efficiencies, and the costs associated with implementing blockchain. For example, as production costs or technology investment cost coefficients rise, the threshold subsidies tend to decline, rendering OSP more favorable due to its demand-driven subsidy structure.
In the context of supply chain profits, both manufacturers and retailers stand to benefit significantly from appropriate subsidy designs, especially when paired with blockchain adoption. For smaller unit subsidies, TSP maintains higher profits due to incentivized emission reductions, while larger subsidies tilt benefits toward OSP by driving higher demand volumes. Blockchain amplifies these effects by magnifying consumer trust and fostering transparency, thus enhancing market responsiveness and profitability simultaneously.
Governmental implications of these findings are profound. Policymakers aiming to accelerate the decarbonization of supply chains must carefully calibrate subsidy intensities, recognize the dynamic role of consumer preferences and trust, and encourage blockchain adoption to maximize transparency. Balancing these elements ensures that subsidies not only stimulate immediate technological investments but also sustain long-term market expansion and environmental outcomes.
The dual driving force of green trust and blockchain technology surfaces as a central pillar in effective low-carbon strategy deployment. While blockchain assures transparency and builds consumer confidence, green trust stimulates demand even in regimes lacking full information transparency. Consequently, in scenarios devoid of blockchain, governments and corporations must deploy active marketing, certifications, and public engagement to cultivate trust and consumer commitment to low-carbon products.
Technological advancements in renewable energy and low-carbon research further interact with subsidy frameworks. As the International Renewable Energy Agency (IRENA) reports, rapid growth in renewable capacity—especially solar installations—reduces costs and enhances emission reduction efficacy. This technological progress, when synergized with well-designed subsidies and blockchain transparency, creates a fertile ground for accelerating the green transition.
Ultimately, the research underscores that a one-size-fits-all approach to subsidy policy is insufficient. Economic environments, production costs, technological sophistication, and consumer market maturity vary widely, all shaping the relative effectiveness of TSP and OSP in different contexts. Adaptive, technology-aware policies that promote transparency and cultivate green trust are essential for sustainable low-carbon investment strategies.
In conclusion, as nations navigate the complexities of sustainable development, this research highlights the transformative potential of integrating blockchain technology with nuanced subsidy policies. The delicate interplay between cost efficiency, consumer preferences, green trust, and technological transparency not only governs firms’ investment decisions but also reshapes market dynamics and environmental outcomes. For policymakers, embracing this multifaceted approach may well be the key to unlocking greater investment in low-carbon technologies and, ultimately, a more sustainable future.
Subject of Research: Low-carbon technology investment strategies influenced by government subsidy policies and blockchain transparency.
Article Title: Low-carbon technology investment strategies with blockchain under subsidy policies.
Article References:
Wei, C., Yuankun, C. & Xin, H. Low-carbon technology investment strategies with blockchain under subsidy policies.
Humanit Soc Sci Commun 12, 1459 (2025). https://doi.org/10.1057/s41599-025-05590-5
Image Credits: AI Generated
