Abstract
To address the high fixed entry cost, insufficient B2B procurement value of certification, and limited incentives for continued emission reduction in product carbon footprint (PCF) certification of energy-storage lithium batteries, this study develops a two-stage Stackelberg game between the government and a manufacturer. Four mechanisms are compared: no subsidy, a performance-based emission-reduction subsidy, a certification-cost subsidy, and a combined subsidy. The model characterizes equilibrium transitions among three manufacturer states: uncertified, compliance-certified, and excess reduction. The results show that, without subsidies, voluntary certification depends on the procurement value of certification, the minimum emission reduction required for certification, and the fixed certification cost. The performance subsidy exhibits dual thresholds for certification participation and emission-reduction intensity; unit product emission reduction increases only after the intensity threshold is exceeded. The certification-cost subsidy mainly relaxes the certification-entry constraint created by fixed costs, whereas the combined subsidy is advantageous when the fixed certification cost is high and a standalone performance subsidy is insufficient to induce participation. A higher certification procurement value broadens the range of voluntary certification, while higher emission-reduction costs, stricter certification thresholds, and larger fixed certification costs increase the need for policy intervention. A higher fiscal shadow cost suppresses the government's optimal total subsidy expenditure. Accordingly, PCF subsidy policy for energy-storage lithium batteries should distinguish the certification-entry stage from continued emission reduction after certification and strengthen coordination between subsidy mechanisms and B2B green procurement.
Keywords:
- Keyword: energy storage lithium battery; product carbon footprint; government subsidy
How to Cite:
Liao, L., Hong, W., Zhang, X., Feng, Z. & Lai, W., (2026) “Subsidy Mechanisms for Product Carbon Footprint Assessment of Energy Storage Lithium Batteries”, Journal of Intelligent and Sustainable Systems (JISS) 2(3).