In the global quest to curb carbon emissions, transportation stands as one of the most critical sectors demanding immediate attention. A recent study heralds a pioneering approach that leverages a dynamic-static combination of government subsidies and penalties to catalyze the adoption of low-carbon strategies among multimodal transport operators (MTOs). Anchored in empirical data from China’s New West Land-Sea Corridor, this innovative framework offers valuable insights into incentivizing systemic behavioral change through adaptive policy instruments, potentially redefining sustainability in freight logistics worldwide.
Multimodal transport, which integrates various transportation methods such as sea, rail, and road freight, inherently presents both opportunities and challenges for carbon reduction. The Chinese firm New Land-Sea Corridor Operation Co., Ltd (NLSC), rated as a four-star multimodal transport operator, serves as a case study for modeling regulatory impact. Here, carbon emissions per ton of cargo stand at about 0.5 kilograms, while the government’s regulatory cost intensity to reduce these emissions is approximately 20 yuan per ton of CO₂. These parameters frame a comprehensive evolutionary game theory model examining how government policies influence MTO behavior and emissions outcomes.
Traditional static mechanisms that rely on fixed subsidies and penalties have proven insufficient in fostering stable, sustainable low-carbon practices. Numerical simulations reveal that such static approaches cause strategy oscillations between active regulation and passive tendencies in governments, as well as fluctuating commitments among MTOs to low-carbon operations. This cyclical instability stems from bounded rationality and information asymmetry, thwarting the realization of an evolutionarily stable strategy (ESS), critical for lasting impact in complex socio-economic systems.
In stark contrast, introducing dynamic mechanisms — subsidies and penalties that adapt based on ongoing market and operational feedback — significantly alters the strategic landscape. When combined with static penalty or subsidy mechanisms, dynamic instruments stabilize the system, guiding both regulators and operators toward mutually beneficial equilibria. For instance, coupling dynamic subsidies with static penalties enables a scenario where the government actively regulates with a probability of about 72%, while MTOs commit to low-carbon operations 61% of the time. This balance culminates in lower expected carbon emissions and reasonable regulatory costs, signaling a breakthrough in policy design efficacy.
Conversely, dynamic penalties paired with static subsidies exhibit increased government regulatory activity but markedly reduced operator willingness for low-carbon practices. While the government’s regulatory involvement rises to 64%, MTOs’ adoption of low-carbon operations dips to only 32%. This disconnect underscores the nuanced interplay where penalties can drive enforcement zeal but may not sufficiently motivate operator compliance without concurrent incentives.
Further exploration into mechanisms featuring both dynamic subsidies and penalties reveals the highest government regulation probability at 83%, yet a modest 38% operator commitment to low-carbon strategies. This hints at diminishing returns in excessive punitive measures and subsidy expenses, highlighting the critical need for balanced intervention that harmonizes fiscal spending with environmental impact.
A comparative analysis crystallizes the dynamic subsidy and static penalty mechanism as the optimal policy blend. This approach maintains a substantive operator engagement level in low-carbon operations, around 72%, paired with a government regulatory presence at 61%. These figures reflect a strategic equilibrium fostering efficiency without undue fiscal burden or operator disenchantment. Such an equilibrium is vital as it ensures sustainable governance and long-term operator compliance, both prerequisites for systemic carbon reduction.
Sensitivity analyses deepen understanding by probing key parameters, including the dynamic subsidy coefficient and static penalty quotas. Notably, escalating the dynamic subsidy coefficient paradoxically reduces government regulatory enthusiasm and operator low-carbon commitments. The rationale lies in excessive government spending dampening incentives for proactive oversight, inadvertently weakening operator motivation. This finding urges policymakers to calibrate subsidies within a balanced range, initiating robust support but tapering over time to maintain regulatory vigor and cost-effectiveness.
Similarly, increasing the static penalty quota yields a counterintuitive pattern: government regulation diminishes while operator low-carbon strategies increase. The higher penalties elevate operational costs for MTOs, compelling them toward greener choices, which in turn allows the government to lessen its direct intervention. By setting penalty levels around an intermediate threshold—such as 35 units in the studied framework—regulators can optimize this balance, securing compliance without triggering regulatory fatigue or resistance.
Supervision and monitoring costs present another vital consideration. Elevated government regulatory expenses inversely affect the willingness to engage in active supervision. As regulatory costs rise, the probability of active governmental intervention declines, detrimentally impacting MTOs’ propensity to adopt sustainable operations. These insights spotlight the importance of deploying advanced information technologies and integrated monitoring platforms to streamline oversight, reduce costs, and enhance regulatory precision.
Delving into economic instruments, the exploratory carbon tax rate analysis reveals intriguing dynamics. Increasing carbon tax rates decrease government eagerness for active regulation but elevate MTOs’ inclination toward low-carbon strategies. A critical tax threshold emerges—around 0.09 in model terms—beyond which governments tend to favor passive regulatory strategies while operators achieve near-perfect compliance. This transition underscores the possibility of shifting from traditional subsidy-penalty regimes toward taxation-based sustainability, offering a scalable, market-driven approach to environmental governance.
Beyond the bilateral relationship between governments and MTOs, the study extends its lens to incorporate cargo owners as pivotal stakeholders. Cargo owners’ preferences and willingness to apply for green certifications form a demand-side market pull that can reinforce low-carbon transport adoption. By sharing subsidies between operators and cargo owners, the framework encourages a cooperative ecosystem where economic incentives align with environmental goals. Although variations in subsidy-sharing ratios do not significantly alter game outcomes, the inclusion of cargo owners enriches the model’s applicability and realism, acknowledging the multiparty nature of sustainable logistics systems.
Policy implications derived from these findings advocate for the adoption of dynamic subsidy-penalty mechanisms, facilitated by real-time monitoring and adaptive policy adjustments. Utilizing digital technologies such as blockchain and IoT sensors could enable precise tracking of carbon emissions, aligning rewards and penalties with verified operator performance. This real-time agility empowers regulators to fine-tune interventions responsively, ensuring sustainable compliance while mitigating unnecessary governmental expenditures.
Furthermore, governments are urged to optimize regulatory costs by enhancing information technology infrastructure and fostering interdepartmental coordination. Collaborative platforms among transport, environmental, and tax authorities enable timely data sharing, reduce redundancy, and support coherent enforcement strategies. Such integrated governance structures can transform fragmented oversight into cohesive, cost-effective regulation, ultimately enhancing policy enforcement and industry compliance.
Strategic sequencing of subsidies and carbon tax policies emerges as another cornerstone for sustainable transformation. Initial high subsidies catalyze early adoption of low-carbon practices, while gradual withdrawal coupled with increased carbon taxation maintains the momentum toward greener multimodal transport. This phased transition balances immediate economic pressures against long-term environmental objectives, accommodating operator adaptation and market evolution.
Regional heterogeneity necessitates tailoring implementation strategies to local infrastructures and market maturity. Areas with advanced rail and port facilities may readily absorb dynamic mechanisms, yielding prompt improvements, whereas regions with nascent logistics ecosystems require phased, flexible interventions coupled with capacity-building investments. Pilot initiatives conducting empirical testing can illuminate context-specific responses, guiding scalable and effective policy dissemination.
Lastly, engaging cargo owners and other stakeholders beyond governmental and operator spheres enriches the regulatory landscape. Encouraging demand for sustainable transport options motivates MTOs to elevate service offerings, while benefit-sharing mechanisms incentivize cargo owners to prioritize green logistics. This broad-based involvement fosters a resilient ecosystem where sustainability permeates market behaviors and expectations.
In summation, the dynamic-static subsidy-penalty framework represents a sophisticated paradigm shift in environmental governance for multimodal transportation. By harmonizing incentives and penalties with real-time market feedback, it addresses the complexities of behavioral economics, regulatory costs, and ecological imperatives. The model’s validation through empirical data and evolutionary game theory simulations substantiates its practical viability. As global carbon reduction mandates intensify, such adaptive policy instruments will be indispensable to forging resilient, low-carbon transport systems that underpin sustainable economic development at scale.
Subject of Research:
Governmental strategies utilizing dynamic and static subsidy-penalty mechanisms to promote low-carbon operations in multimodal transportation systems.
Article Title:
Government subsidy-penalty strategy to promote low-carbon multimodal transportation using dynamic-static combination mechanism.
Article References:
Hu, X., Cheng, R., Zhao, J. et al. Government subsidy-penalty strategy to promote low-carbon multimodal transportation using dynamic-static combination mechanism. Humanit Soc Sci Commun 12, 762 (2025). https://doi.org/10.1057/s41599-025-05087-1
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