Stackelberg Game for Ship Emission Policy Design
International, regional, and local maritime regulators around the world have implemented and are planning a number of regulations that aim to curb air emissions from ships, such as carbon dioxide, sulphur oxides, nitrogen oxides, and particulate matter. Ship operators, instead of aiming at reducing emissions, make decisions with the objective of minimizing costs. As a result of cost minimization, ship operators may abide by the emission regulations in a way different from what the regulators anticipated, that is, in a way that generates undesirable side effects or even more emissions. Therefore, when designing emission regulations, maritime regulators must take into account how ship operators will react to the regulations. Our research on applying Stackelberg game-theoretic models to examine this problem is sponsored by the Hong Kong Research Grants Council and the National Natural Science Foundation of China. The main research outputs are as follows.
We systematically examined how liner shipping companies should operate their ships to minimize costs under emission control area (ECA) rules. (link)
We pointed out that the regional regulation of including shipping carbon emissions into the European Union Emissions Trading Scheme may lead to evasive port calls by ships, compromising the effect of the regulation. (link)
We warned that the domestic ECA of China is inherently different from the ECAs in Europe and North America and that China should not tighten the sulphur limit in its domestic ECA to 0.1% without a very careful study of possible reactions from ships. (link)
In case of enquiries or feedback, please contact Professor Shuaian (Hans) Wang at hans.wang@polyu.edu.hk