Game-Theory-Based Analysis Of Bilateral Trade And Border Carbon Adjustments Of Harvested Wood Products

The role of forest resources in addressing climate change is receiving more and more attention.As an extension of forest resources,the value of carbon storage in harvested wood products(HWP)has also been widely discussed.The global trade in HWP is accompanied by serious carbon storage leakage from HWP,and it has been pointed out that such leakage can significantly affect the role of HWP in mitigating climate change.The carbon border adjustment is currently the main way used to solve carbon leakage.Therefore,this paper explored the potential of an export carbon border adjustment tax on the carbon stocks of exported HWP,and investigated the potential of this carbon border adjustment approach in addressing the carbon stock leakage of HWP,and analyzed its impact factors and implementation effects.This paper firstly sorted out the theoretical basis and research methods.The theoretical basis of the study was international public goods theory,externality theory and dynamic game theory,and the research methods were dynamic game research method,comparative analysis method and numerical simulation method.Secondly,a three-stage bilateral trade game model is constructed with the game background of HWP’s trade,and the game is divided into three different scenarios,namely,the baseline scenario,the unilateral carbon border regulation scenario and the bilateral carbon border regulation scenario.Then,the optimal strategy functions in the game results are analyzed to explore the influencing factors of carbon border regulation and the impact of carbon border regulation on HWP’s trade.Then,through numerical simulation of the game results,the influencing factors and implementation effects of carbon border regulation are further clarified,and the response strategies of enterprises are analyzed on the basis of the implementation effects.Finally,based on the results,this paper put forward targeted opinions.Through the analysis,the main conclusions of this paper were:(ⅰ)The influencing factors of the government’s optimal carbon border regulation tax rate are:the value of carbon storage of HWP,the substitutability of HWP,the maximum market demand of exporting countries,and carbon tax.Among them,the value of carbon stock of HWP included two factors: the amount of carbon stock per unit of HWP and the economic value of carbon stock per unit of HWP.Other influencing factors were specifically influenced in the following ways: the lower the substitutability of HWP,the lower the maximum demand in the market of exporting countries,the lower the carbon tax rate,and the higher the optimal carbon border adjustment tax rate of the government.(ⅱ)The impact of the government’s implementation of carbon border regulation on the HWP market was that countries that have long relied on imported HWP may face the risk of shortage of HWP supply and higher forest product prices.China was highly dependent on the international market for wood supply,and it was important to take measures to deal with a possible forest product supply crisis.(ⅲ)The effects of implementing government carbon border regulation are as follows: carbon border regulation for HWP could reduce net exports of carbon stocks,but it could only play a role in slowing down the leakage of carbon stocks if both trading partners take measures;the way carbon border regulation affects national welfare was influenced by other countries’ policies,but the level of welfare when carbon border regulation was imposed would be always higher than that under the same conditions,regardless of the measures taken by trading partners The implementation of carbon border adjustment would reduce the profits of HWP’s exporters,but the companies could take measures to reduce costs and expand sales channels to maintain profits.Based on the above conclusions,this paper made several suggestions to the government and enterprises respectively: firstly,in order to maintain the carbon stock value benefits of HWP,the government should actively participate in negotiating international regulations and systems for carbon border regulation;secondly,in order to implement carbon border regulation more effectively,the government should improve the carbon stock value assessment system for HWP;thirdly,in order to cope with the possible supply crisis of forest products,the government should actively expand the supply chain of HWP in China;fourthly,in order to take the initiative in carbon border regulation,the government should take measures to optimize the business environment of forestry enterprises.The findings of this paper have certain implications for both policy makers and enterprises.It would also provide new perspectives and ideas on mitigating global climate change and promoting sustainable development from the field of forest products trade.