Subsidy strategy design for shore power utilization and promotion

Abstract

ABSTRACTShore power is an important green technology used by ports to reduce carbon emissions. This paper investigates how to design subsidy strategy for promoting the installation and utilization of shore power. However, while installation subsidies may promote the installation of SPI in ports, resulting in a reduction in ship emissions, utilization subsidies may attract more ship visits, which may increase the total emissions of a port. Therefore, subsidies for shore power utilization and installation should be optimized to minimize the cost to government (comprising the environmental costs of ship emissions, the cost of utilization or installation subsidies, and carbon taxes) and maximize the profit for ports (including profit from original and new ships, utilization and installation subsidies, and carbon taxes). Using the Stackelberg game methodology, we discuss five cases to give a comprehensive analysis of the design of different subsidy policies, including no subsidy, SPI-utilization subsidy undertaken by port, SPI-utilization subsidy undertaken by port and government, carbon emission tax policy considering SPI-utilization subsidy, and SPI-utilization and SPI-installation subsidies undertaken by port and government. Managerial insights are generated according to the theoretical analysis and numerical experiments results, which can give references to the government and port operators.KEYWORDS: Green portsshore powersubsidy designcarbon taxStackelberg model Disclosure statementNo potential conflict of interest was reported by the author(s).Additional informationFundingThis work was supported by the National Natural Science Foundation of China [Grant No. 71831008, 72201163, 72025103, 72361137001, 72071173], and the Research Grants Council of the Hong Kong Special Administrative Region, China [Project number HKSAR RGC TRS T32-707/22-N].