Abstract: Considering the factors of product competition, product green level and consumers’ green preference, a three-stage game model between government and two competitive enterprises is established. Then the effects of single government subsidy and combination of environmental tax and government subsidy policies are simulated with data. The results show that there are optimal efficiency points in the effect of single government subsidy or policy combination; compared with single government subsidy policy, the policy combination of environmental tax and government subsidy significantly enhances the effect of green upgrading of enterprise products and promotes the green level of all products; but when the intensity of environmental tax and government subsidy increase in proportion, social welfare benefits have a downward trend.