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Mechanism Analysis of Applying Blockchain Technology to Forestry Carbon Sink Projects Based on the Differential Game Model

Author

Listed:
  • Rui Sun

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Dayi He

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Jingjing Yan

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Li Tao

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

Abstract

As an important way to reduce emission, forestry carbon sink (FCS) has not been implemented effectively. Therefore, this paper aims to analyze the effectiveness and mechanism of applying blockchain technology in FCS projects by utilizing the differential game model. A Stackelberg differential game model between forest farmers and emission-controlled enterprises (ECEs) is developed to analyze the optimal emission reduction efforts and the optimal trajectory of forest farmers and ECEs before and after introducing blockchain technology. It is found that: (1) At the initial stage of the utilization of blockchain technology, if blockchain technology takes a leading role in stabilizing carbon prices, the ECEs prefer to purchase FCS instead of reducing emissions by their own technology. On the contrary, if blockchain technology takes a leading role in stimulating the vitality of the carbon trading market, ECEs tend to use emission abatement technology to meet the carbon quote requirements. (2) In the later stage, the incentive and stabilizing effects of blockchain technology on carbon prices tend to be balanced, and the emission reduction efforts of ECEs are lower than the efforts before applying blockchain technology. (3) The application of blockchain technology increases forest farmers’ willingness to reduce emissions because of its effection of cost reduction and efficiency improvement. Meanwhile, blockchain technology reduces abatement costs by influencing carbon prices. Therefore, blockchain technology improves forest farmers’ emission reduction efforts on the whole.

Suggested Citation

  • Rui Sun & Dayi He & Jingjing Yan & Li Tao, 2021. "Mechanism Analysis of Applying Blockchain Technology to Forestry Carbon Sink Projects Based on the Differential Game Model," Sustainability, MDPI, vol. 13(21), pages 1-18, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11697-:d:662734
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    References listed on IDEAS

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    3. Xiwen Fu & Shuxin Wang, 2022. "How to Promote Low-Carbon Cities with Blockchain Technology? A Blockchain-Based Low-Carbon Development Model for Chinese Cities," Sustainability, MDPI, vol. 14(20), pages 1-17, October.
    4. Arsenii Vilkov & Gang Tian, 2023. "Blockchain’s Scope and Purpose in Carbon Markets: A Systematic Literature Review," Sustainability, MDPI, vol. 15(11), pages 1-27, May.
    5. Hongyi Liu & Tianyu He, 2023. "Sustainable Management of Land Resources: The Case of China’s Forestry Carbon Sink Mechanism," Land, MDPI, vol. 12(6), pages 1-18, June.

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