This paper analyzes the joint impacts of emission trading and consumer low-carbon awareness onmonopolistic firm’s decisions about product carbon emission intensity and price. We establish a profitmaximization model and derive the optimal strategies through optimizing techniques. Numericalexperiments are conducted to show the impacts of various influential factors on equilibrium results. Wefind that carbon price and consumer low-carbon awareness both have positive effects on a firm’semission reduction effort while have intricate impacts on its pricing strategy. Both emission cost andabatement cost will be partially passed to consumers through product price, while a price cut occurs forcompensating consumers’ aversion toward carbon footprint embedded in the product. The carbon cap islike a piece of cake allocated to the firm for compensating its emission charges, while has no effect toits emission abatement nor pricing decisions. Generally, it is easier to induce emission abatementbehavior for a firm with lower marginal emission abatement cost, or with less price sensitiveconsumers.
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