Low-Carbon Technology Investment Strategies Enhanced by Blockchain Under Government Subsidy Policies
Published in Humanities and Social Sciences Communications, September 6, 2025
As governments worldwide champion digital transformation and environmental sustainability, the intersection of blockchain technology and low-carbon investment strategies has garnered growing academic and practical interest. A recent study by Chen Wei, Chen Yuankun, and Huang Xin, published in Humanities and Social Sciences Communications, delves into how government subsidy policies impact manufacturers’ investment in low-carbon technologies, particularly in supply chain contexts that increasingly adopt blockchain systems.
The Context: Transitioning Toward Low-Carbon Supply Chains
Governments across the globe actively promote low-carbon transitions in industry sectors such as electricity, transportation, construction, and renewable energy. The aim is to mitigate greenhouse gas emissions and foster a sustainable economic growth model aligned with global climate commitments. Low-carbon technology (LCT) investments—ranging from clean coal use to carbon capture and storage—are pivotal in enhancing energy efficiency and reducing emissions.
However, the initial costs of adopting such technologies can be prohibitive for enterprises. To alleviate these barriers, governments enact subsidy policies designed to encourage investments that lead to greener outputs. These subsidies primarily take two forms:
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Technology Subsidy Policies (TSPs): Providing upfront financial support for research, development, and equipment procurement. An example is the Jing’an District Government in Shanghai offering a 30% subsidy for energy-saving renovation projects.
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Output Subsidy Policies (OSPs): Offering financial rewards based on the actual output of low-carbon products or verified emission reductions, exemplified by the Fanchang District Government’s policy providing subsidies per unit of photovoltaic energy consumed.
While TSPs motivate companies to invest ex-ante in technology, OSPs incentivize performance through ex-post payments.
Blockchain’s Emerging Role in Low-Carbon Supply Chains
Blockchain technology (BT)—known for its decentralized, transparent, and tamper-proof data-sharing features—has emerged as a potent enabler for managing carbon emissions across supply chains. For instance, China Huadian Corporation’s blockchain-based digital carbon emission management system helps enhance the credibility and traceability of green product information.
By improving data transparency and reducing information asymmetry, blockchain technology potentially elevates consumer trust in green products, enabling enterprises to justify higher pricing and incentivize further low-carbon investments. Moreover, blockchain can improve production efficiency, contributing to cost reductions. Some governments, like Zhejiang Province in China, have even established broadband blockchain platforms to manage and share carbon emission data covering millions of tonnes.
Key Research Questions and Methodology
The study conducted by Wei, Yuankun, and Xin focuses on three pivotal questions:
- How do different subsidy policies influence manufacturers’ decisions to invest in low-carbon technologies?
- Which subsidy mechanisms—technology-oriented or output-based—are more effective in promoting low-carbon investments?
- To what extent does consumer trust in green products affect manufacturers’ pricing strategies?
To explore these questions, the researchers developed a game-theoretic framework involving four supply chain models. These models simulate scenarios both with and without blockchain adoption, as well as with technology subsidies and output subsidies. Through this modeling, the study evaluates subsidy impacts on investment levels, pricing decisions, and overall supply chain decarbonization.
Findings and Implications
The analysis yields several important insights:
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Subsidies Drive Investment: Larger government subsidies unequivocally encourage manufacturers to invest more heavily in low-carbon technologies. Higher total subsidy amounts amplify this effect.
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Blockchain Influences Pricing Strategies: In supply chains without blockchain adoption, technology subsidies tend to lead to higher product prices. However, when blockchain is integrated, manufacturers strategically raise wholesale prices to capture a larger share of subsidy benefits. The extent of price adjustments correlates with the subsidy size.
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Consumer Trust Matters: Strengthening consumer confidence in green product claims—facilitated by blockchain’s transparency—fosters greater low-carbon investment by companies. Importantly, this heightened trust allows manufacturers to increase wholesale and retail prices without suppressing consumer demand.
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Policy Design Nuances: Policymakers must carefully calibrate subsidy schemes, especially technology subsidies, in markets lacking blockchain infrastructure to avoid unintended market distortions or dampened consumer purchases.
Contributions to Theory and Practice
This study advances theoretical understanding by integrating blockchain technology with differential subsidy policies within a single analytical framework. It highlights the nuanced ways in which technology adoption, subsidy types, and consumer perceptions interact to influence corporate behavior in low-carbon supply chains.
From a practical perspective, the research offers valuable guidance for:
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Policy Makers: Designing more effective subsidy schemes that consider the technological maturity of supply chains and the behavioral responses of manufacturers.
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Industry Stakeholders: Crafting competitive pricing and investment strategies that leverage digital innovations like blockchain to enhance transparency and consumer trust.
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Researchers: Exploring further dimensions of low-carbon governance that address information asymmetries and technology-policy interactions.
Conclusion
The integration of blockchain technology with appropriately structured government subsidies represents a promising pathway for accelerating investments in low-carbon technologies within supply chains. By fostering transparency and trust, blockchain can enhance the effectiveness of subsidy policies, ultimately supporting global efforts toward sustainable development and emission reduction.
For further details, the full article "Low-carbon technology investment strategies with blockchain under subsidy policies" is available open access in Humanities and Social Sciences Communications, volume 12, article number 1459 (2025).
