Dynamic incentives to promote green production of the iron and steel industry in the post-pandemic period

As a consequence of the rebound in steel demand, the rises in bulk commodity prices (e.g., coal, oil and iron ore) and uncertainties of global supply chains in the post-pandemic period, there is a great opportunity for governments to implement incentive policies in the iron and steel industry (ISI) to promote green production and realize long-term sustainable development goals. In response, this paper introduces innovative dynamic reward and penalty policies and constructs an evolutionary game model of government intervention for achieving green production of the ISI. The decision-making behaviours of game participants (i.e., local governments and steel companies) are then examined. To evaluate the efficacy of the proposed model, numerical simulation is conducted and the effects of four different policies are investigated. Numerical results indicate the following managerial insights for improving the sustainable development in the ISI: (i) local governments must eliminate bureaucracy and cut back expenditure on unnecessary items; (ii) local governments need to define reasonable bounds on the imposed reward and penalty; (iii) reward and penalty policies should be flexible and responsively adapted to different periods of the pandemic and beyond; and (iv) the dynamic reward and static penalty (DR-SP) policy is preferable to promoting green production in the ISI.