Tax regimes, investment subsidies and the green transformation of the maritime industry
Journal article, Peer reviewed
Published version
Date
2023-04-21Metadata
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Original version
Transportation Research Part D: Transport and Environment. 2023, 119 (June 2023), 1-13. 10.1016/j.trd.2023.103741Abstract
Maritime nations aim at establishing an environmentally sustainable shipping industry by 2050. We use insight from real options theory to target tax reforms that may facilitate the industry’s transformation to sustainability. We demonstrate that a zero-cost tax package, which includes subsidies on green investments and a return to a regular income tax regime, can reduce investment thresholds. “Flags of convenience” and tonnage tax systems do not contribute to the sharing of risk between shipowners and governments. From a shipowner’s perspective a higher degree of risk sharing reduces the value of waiting to invest, which may shift an individual investment decision towards a sustainable optimum level.
Description
Jostein Tvedt, Tor Wergeland, Tax regimes, investment subsidies and the green transformation of the maritime industry, Transportation Research Part D: Transport and Environment, Volume 119, 2023, 103741, ISSN 1361-9209, https://doi.org/10.1016/j.trd.2023.103741.