In this study, we developed a multi-stage differential game to examine how a firm and an insurer coordinate a corporate low-carbon transition. Carbon intensity, green reputation, and the cost of carbon allowance-backed financing were modeled as state variables. The transition comprised three stages: a Nash game with independent decisions, a Stackelberg game in which the insurer offers premium incentives and shares abatement costs, and a cooperative game with joint optimization. Feedback equilibrium strategies were derived from the corresponding Hamilton–Jacobi–Bellman equations, and their economic properties were compared analytically. Numerical experiments and Monte Carlo tests evaluated the effects of carbon prices, regulatory penalties, and cost-sharing rates. The results showed that cost sharing increases the firm's abatement effort and can yield a Pareto improvement when the insurer's marginal return is sufficiently high. Joint optimization produces the lowest steady-state carbon intensity and the highest total profit. Higher carbon prices strengthen the incentive to abate but may reduce total profit, whereas regulatory penalties can be transmitted through premium discounts. The cooperative regime is also the most robust to parameter perturbations. These findings identify the conditions under which green insurance can evolve from risk transfer to an intertemporal coordination mechanism for corporate decarbonization.
Citation: Yiqin Wu, Zhenyong Wu, Ran Gao, Yujie Huang, Yu Zhang. Green insurance coordination for corporate low-carbon transition: A multi-stage differential game[J]. Journal of Industrial and Management Optimization, 2026, 22(10): 5382-5416. doi: 10.3934/jimo.2026185
In this study, we developed a multi-stage differential game to examine how a firm and an insurer coordinate a corporate low-carbon transition. Carbon intensity, green reputation, and the cost of carbon allowance-backed financing were modeled as state variables. The transition comprised three stages: a Nash game with independent decisions, a Stackelberg game in which the insurer offers premium incentives and shares abatement costs, and a cooperative game with joint optimization. Feedback equilibrium strategies were derived from the corresponding Hamilton–Jacobi–Bellman equations, and their economic properties were compared analytically. Numerical experiments and Monte Carlo tests evaluated the effects of carbon prices, regulatory penalties, and cost-sharing rates. The results showed that cost sharing increases the firm's abatement effort and can yield a Pareto improvement when the insurer's marginal return is sufficiently high. Joint optimization produces the lowest steady-state carbon intensity and the highest total profit. Higher carbon prices strengthen the incentive to abate but may reduce total profit, whereas regulatory penalties can be transmitted through premium discounts. The cooperative regime is also the most robust to parameter perturbations. These findings identify the conditions under which green insurance can evolve from risk transfer to an intertemporal coordination mechanism for corporate decarbonization.
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Yiqin Wu, Zhenyong Wu, Ran Gao, Yujie Huang, Yu Zhang. Green insurance coordination for corporate low-carbon transition: A multi-stage differential game[J]. Journal of Industrial and Management Optimization, 2026, 22(10): 5382-5416. doi: 10.3934/jimo.2026185
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