The Impact of Low-Carbon Certification in a Duopolistic Market with Incomplete Information

This paper explores the role and impact of low-carbon certification in a duopolistic competitive market. We establish a model considering customers' green preferences and companies' low-carbon certification decisions under different states of the certification market. Results show that: (1) Compared to the low certification penetration, the market with the high certification penetration rate has a higher certification cost threshold for enterprises to participate in low-carbon certification actively. (2) In a market with high certification penetration, blindly reducing certification costs does not always contribute to reducing expected total carbon emissions. There is an optimal range of low carbon certification costs to minimize the expected total carbon emissions. (3) In a market with low certification penetration, companies lack low-carbon benefits due to the asymmetry of low-carbon information between enterprises and consumers. In contrast, a high certification penetration market offers more profitable opportunities for companies to engage in low-carbon certification. (4) Interestingly, implementing certification does not necessarily effectively reduce the expected total carbon emissions. The expected total carbon emissions in the market under low certification penetration are always more significant than that under non-certification. Therefore, the government can promote enterprises to actively participate in low-carbon certification by improving consumers' recognition