Optimal Choice of Enterprise's Production Strategy under Constraints of Carbon Quota

After analyzing the enterprise’s production strategy under the constraints of carbon quota, this paper proposes new mathematical models aiming for the optimal choice of enterprise’s production strategy under the monopoly and competitive environments respectively. Combining the neural network optimization theory, then the methods of Nonlinear Programming and Nash Equilibrium in Static Games are used to solve the models to obtain the enterprise’s equilibrium quantity, the optimal carbon emission, and the profit of unit product in the low carbon technology. The study found that: under a monopoly environment, enterprises choose technology innovation strategy; under a competitive environment, enterprises use carbon trading strategies whenever carbon trading prices are low or high; however, there is no pure strategy Nash equilibrium when carbon trading prices are in the middle, in this case enterprises prefer to use the production strategies different from the competitor.