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How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis

Author

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  • Zhao, Chuan
  • Guo, Qidong
  • Jia, Rongwen
  • Dong, Kangyin
  • Wang, Kun

Abstract

Clean energy transition is the new driving force promoting low-carbon emissions in the manufacturing industry. It brings huge economic opportunities as well as challenges for manufacturers and the government. Original design manufacturers (ODMs) are regarded as a special group of manufacturers in clean energy transition due to their close partnership with foreign parent companies (FPC) in research, design, production, and most importantly, decision making along the supply chain. ODMs are usually restricted by contracts with FPCs and clean energy policies of the local government. To analyze the influence of technology sharing and leakage, investment mode, accountability mechanism, and penalty sharing mechanism, especially static or dynamic energy policies on the clean energy transition, this study constructs a tripartite evolutionary game model composed of ODMs, FPCs, and the local government. The model discusses the guiding effect of multiple policies on ODMs' clean energy transition and FPCs' investment behaviors with the study of stable points, double stable states, and unstable states of the evolutionary game. The results reveal that the conformity effect in clean energy transition would enable ODMs and their FPCs to achieve a win-win result in the process of the transition. The dynamic policy has also been designed considering the proportion of ODMs using clean energy to economize government resources, and the basic subsidy to the transition poses a reverse “U” shape instead of a monotonous effect on ODMs' choices. This paper concludes an optimal clean energy transition strategy for ODMs under the dual pressure of FPCs and governments, while providing theoretical support for the dynamic policy design.

Suggested Citation

  • Zhao, Chuan & Guo, Qidong & Jia, Rongwen & Dong, Kangyin & Wang, Kun, 2023. "How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis," Energy Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323004632
    DOI: 10.1016/j.eneco.2023.106965
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    More about this item

    Keywords

    Clean energy transition; ODM supply chain; Dynamic clean energy policy; Tripartite evolutionary game;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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