Government subsidies can help companies reduce emissions and produce goods in a more environmentally friendly way. This study looked at how different types of subsidies, like ones based on emissions reduction quantity or investment cost, affect production decisions under carbon tax regulations. The researchers found that subsidies can widen the conditions for improving emissions reduction investments, especially when combined with a heavy carbon tax or increased consumer awareness. They also discovered that subsidies based on emissions reduction are more beneficial for maximizing social welfare compared to investment cost subsidies.