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Evaluating government penalty policies in shipping emission control areas: an evolutionary game theory approach

Tingsong Wang, Yu Chen and Shihao Li

Transport Policy, 2025, vol. 171, issue C, 641-660

Abstract: To address the issue of ships illegally using high sulfur fuels in shipping emission control areas (ECA), this study constructs an evolutionary game model between the government and ships, aiming to investigate the effectiveness of different policy tools (penalties, subsidies, inspections) in suppressing ship violations. Through case analysis, we focus on analyzing the dynamic impact of government inspection success rate, subsidy level, and penalty amount on ship violation rate. The analytical results reveal that simply increasing the success rate of government inspections can slow down the evolution of violations, but cannot significantly reduce the final violation rate; Increasing subsidies for the simultaneous use of scrubbers and LSFO can effectively control the violation rate; The regulatory effect of increasing the amount of penalty is most significant. When the penalty increases by 100 %, the violation rate drops to 0.63, and when it increases by 200 %, it further drops to 0.51 and the convergence speed is greatly improved. In addition, the combination policy optimization of increasing subsidies and penalties simultaneously is more effective than single parameter modification. Increasing both within 1.5–2 times can best reduce violation rates and improve system stability. These findings reveal the effectiveness of penalties in quickly curbing violations, as well as the ability of technology and fuel subsidies to take into account conflicting target measures not currently considered in ship penalty subsidy policies. The results provide a basis for the government to optimize the penalty policy for ECA regulation: in the case of limited regulatory resources, priority should be given to increasing the penalty intensity, supplemented by targeted subsidies, in order to achieve emission reduction targets.

Keywords: Government penalty policies; Emission control areas (ECA); Scrubber subsidies; Low sulfur fuel oil; Evolutionary game theory (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.tranpol.2025.07.004

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