Evaluation of Green Strategies for Inland Vessels and Government Subsidy Policies by Evolutionary Game Model

Abstract

Environmental sustainability has become an increasingly critical issue in the inland shipping sector. The adoption of green-fuelled vessels, data-driven speed optimization enabled by digital and intelligent technologies, and the use of shore power during berthing can substantially reduce harmful emissions from shipping activities and enhance environmental performance. This study investigates the evolutionary stable strategy (ESS) of inland shipowners’ green initiatives under government subsidy schemes. Firstly, a decision-making framework is developed by incorporating price elasticity, market competition, green investment, and subsidy intensity, through which pricing, subsidies, demand, and profit decisions are jointly modeled. Secondly, a game-theoretic model involving two market participants under three alternative strategies is constructed, together with an effective solution approach. Thirdly, based on evolutionary game theory, the equilibrium strategies ultimately adopted by the majority of inland shipowners are derived, and sensitivity analyses of key parameters are conducted. The results indicate that: (1) shipowners implementing green strategies can achieve higher economic returns, and green strategies are expected to be adopted by approximately 71.55% of inland shipowners in the long-term; (2) governments should increase subsidy intensity in the early stage of green strategy development, while gradually reducing subsidies once the market reaches a stable equilibrium. The findings provide theoretical insights for inland shipowners’ strategic decisions in environmentally conscious markets and offer policy implications for governments seeking to design stable and effective subsidy mechanisms to promote the green transition of inland shipping services.