Abstract: In view of the aggravation of the current problem of nitrogen pollution in the river basin, the dynamic evolution process of the local government’s supervision strategy and the enterprise’s nitrogen emission reduction strategy selection under static and dynamic subsidy policies wasinvestigated based onthe evolutionary game method. The local government and enterprises with bounded rationality participating in the pollution emission trading mechanism are regarded as game players. In present study, the influence of various parameters on the equilibrium point is analyzed under the dynamic subsidy policies, and finally simulation analysis is carried out. The results show that under the static subsidy mechanism, the system has four stable evolutionary strategies and cyclical fluctuations in one situation. Enterprises' choice of emission reduction strategy is mainly based on the comparison between the cost and benefit of nitrogen emission reduction, and whether the government regulates or not is mainly determined by the comparison between the cost of public opinion and the cost of supervision, subsidy and other factors. When the local government implements the dynamic subsidy mechanism, the evolutionary trajectory of both sides of the game will converge to the only mixed strategy equilibrium point.

Key words: emission trading in the river basin, nitrogen emission reduction, subsidy mechanism, evolutionary game, evolutionary stable strategy