The Economics of Supply-Side Carbon Mitigation

Abstract

Carbon emission mitigation not only alleviates environmental externalities but also promotes industrial upgrades and facilitates green development. This paper reviews the impact of supply-side carbon mitigation on the economy and explores the pathways to achieve it. Through the study of the historical context of supply-side emissions reduction, case studies of companies, and theoretical pathways of carbon reduction's impact on socio-economic factors, this article asserts that carbon reduction has yielded tangible results and can sustain economic growth through industrial upgrading and changes in production factors. The Cobb-Douglas production function demonstrates that technological innovation can offset the reduction in production factors caused by emission reduction. Further comparative analysis of wind, solar, and hydrogen energy suggests that existing clean energy technologies still require innovation and cost reduction in order to achieve widespread adoption. Technological innovation can be achieved through subsidies for low-carbon technology research and development and policy support for enterprises and industries. This paper argues that, notwithstanding the significant role of energy in economic development, under the context of supply-side carbon mitigation, it is possible to achieve both carbon reduction and economic growth through technological innovation, improved energy efficiency, enhanced production processes, and the adoption of new green energy sources.