Decision-making of Enterprise Greenwashing Behavior Under The Background of Carbon Tariff

Abstract

Research background: As the EU deals with carbon leakage through carbon tariffs, export enterprises of some countries that do not meet the carbon emission standards face the problem of increasing export costs, so these enterprises have the tendency of "green washing". Therefore, how enterprises make decisions to deal with carbon tariffs and avoid the impact of changes in the terms of trade has become a hot topic. Based on the cost constraints of enterprises in developing countries, the information asymmetry between upstream and downstream enterprises, and the external environment constraints such as government and enterprise regulation and subsidy strategies, enterprises will make different decisions, including "brown enterprise" behavior that only considers economic benefits and "green enterprise" behavior that considers both economic benefits and environmental benefits. The research approach in this paper is based on game-theoretic analysis and adopts the supply chain game model proposed by Pretis (2022) [1]and Dong (2023[2]). This paper mainly discusses the different situations of maximizing the profit of individual enterprise and the profit of the whole supply chain through the game of the manufacturer's cost information advantage and the retailer's market information advantage. Finally, let business and government work together to get business to cancel the green washing practices that have been adopted. Conclusion: Based on the hypothesis that the EU is imposing carbon tariffs on developing countries, the greenwashing behavior of manufacturers and retailers is related to the green investment return rate of enterprises, the cost and rate of return of blockchain technology, and government subsidies.