Management Review

Management Review ›› 2026, Vol. 38 ›› Issue (9): 43-54.

• Economic and Financial Management • Previous Articles    

The Impact of Carbon Quota Mechanisms on Renewable Energy Investment Strategies under Carbon Misreporting and Feed-in Tariff Cap Constraints

Chen Wei1,2,3, Xia Xing1, Bai Chunguang4, Ma Yongkai4   

  1. 1. College of Management Science, Chengdu University of Technology, Chengdu 610066;
    2. Energy, Environment and Carbon Neutrality Innovation Center, Chengdu 610066;
    3. Guangdong Institute of Information Engineering, University of Electronic Science and Technology of China, Dongguan 523808;
    4. School of Economics and Management, University of Electronic Science and Technology of China, Chengdu 611730
  • Received:2025-01-13 Published:2026-10-09

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Abstract: Under carbon allowance mechanisms, power generators have incentives to misreport their carbon emissions. Considering the practical constraint of feed-in tariff caps, this study incorporates generators’ carbon misreporting and renewable energy investment decisions to examine the misreporting behavior and investment strategies under total allowance and unit allowance mechanisms. By analyzing the equilibrium outcomes, the study finds that: (1) as the misreporting cost coefficient increases, renewable energy investment rises, while the level of misreporting and the profits of supply chain firms both decline; (2) when the feed-in tariff cap is low, the unit allowance mechanism is more effective in promoting renewable energy investment and results in lower misreporting, whereas when the cap is high, the total allowance mechanism performs better in both dimensions; and (3) when the unit allowance is relatively small, generators disclose higher carbon emissions under the unit allowance mechanism, whereas when the unit allowance is relatively large, disclosed emissions are higher under the total allowance mechanism.

Key words: carbon misreporting, feed-in Tariff, carbon quota mechanism, renewable energy investment