An Analysis of the Impact of Government Subsidies on Emission Reduction Technology Investment Strategies in Low-Carbon Port Operations

Abstract

The sustainable development of the maritime supply chain is an undeniable trend. Low-carbon port operations are a vital component of creating an eco-friendly maritime supply chain, requiring substantial investments in technologies that reduce carbon emissions. However, the key factors influencing investment decisions by ports and shipping companies in these green technologies, particularly government subsidies, remain poorly understood. Hence, this paper proposes a game-based framework to explore the impact of government subsidies. Through numerical analysis, this study first demonstrates that the pricing decisions, investment level, and profits of ports and shipping companies are sensitive to government subsidies and low-carbon preferences of the market; however, the influence of government subsidies and low-carbon preferences varies with different adopted investment strategies. Furthermore, investment decisions are mainly influenced by investment costs, low-carbon preferences, government subsidies, and cost-sharing ratios. Ports are more sensitive to government subsidies and low-carbon preferences while shipping companies are more sensitive to government subsidies and cost-sharing ratios. In addition, government subsidies and low-carbon preferences are substitutes for each other and can balance cost-sharing ratios between ports and shipping companies. Finally, recommendations are provided to the government, ports, and shipping companies for promoting low-carbon port operations based on the findings of this study.

Keywords

• low-carbon port operations
• government subsidies
• low-carbon preferences
• game theory