Abstract
This study examines the carbon reduction investment decisions of the electric power energy supply chain considering carbon trading and carbon subsidy policies in China’s “dual carbon” context. By building a three-level supply chain system including electric power producers, retailers, and consumers, we discuss the optimal decision-making problem of the supply chain for three models of decentralized supply chain decision making without government subsidies, centralized supply chain decision making with government subsidies, and centralized supply chain decision making with government subsidies and carbon emission reduction cost sharing. Through model solving and further numerical simulations, the results showed that the increase in carbon emission reduction investment cost has a significant negative impact on power price and the total expected income of the supply chain. However, a reasonable level of government carbon emission reduction subsidy can effectively alleviate the increase in power price and improve the total expected income of supply chain. In addition, carbon mission reduction investment and supply chain cost allocation can effectively improve the carbon emission reduction level of the power supply chain, improve the income and enthusiasm of electric power producers, and realize the sustainable development of electric power energy consumption and the environment.