One shipping company becoming 100% green can accidentally force its competitors to keep polluting for years.
The total success of a single actor in sustainability can suppress the incentive for the rest of the industry to invest in green tech. In a competitive market, a leader's transition to shore power can lock in a green paradox for the remaining firms. We assume that a major success in decarbonization will provide a roadmap for everyone else to follow. Instead, it can create a market environment where the laggards find it more profitable to stay with dirty energy. This structural trap hinders the overall goal of saving the planet.
Shore Power Adoption Strategies for Liner Companies: The Role of Market Environment
SSRN · 6637903
Under a game-theoretic framework of two ports and two liner companies (A and B), this study analyzes A’s optimal shore power strategies under three competitive scenarios of B: non-adoption, partial adoption and full adoption. The results show that A’s optimal decisions are scenario-based. Non-adoption is optimal if B rejects shore power and both port congestion costs and environmentally conscious shipper volume stay below critical values. When B adopts shore power partially, A favors differentia