The Study of Optimal Production with Emission Permits and Trading Considering the Government Subsidies

The paper focuses on, in academic, to the problem of emission permits and trading on the optimal production policy supported by Government subsidies. The influence and the differences between Government quotas and subsidies ways are analyzed, The firm production models considering government subsidies way and emission permits and trading are constructed, the minimum purification level theorem is proved. Then the optimal purification level is calculated, the relationship between the optimal production and optimal revenue is explored, the simulation result are conformed with the analysis given, and the firm optimal production management in such supporting way is discussed.