Should governments subsidize inputs or outputs? Technology spillovers and policy design in aviation decarbonization

Under the aviation industry's 2050 net-zero emission target, airport green infrastructure investments serve as a critical driver of industrial chain decarbonization by lowering airlines' marginal abatement costs through technology spillovers. However, existing literature predominantly treats airport investments as exogenous, overlooking the heterogeneous impact of technology spillovers on the government's choice of subsidy instruments. This paper develops a Stackelberg game model incorporating technology spillover effects to systematically compare ex-ante cost-sharing subsidies and ex-post performance-based rewards under both budget-constrained and unconstrained scenarios. Our findings reveal that airport investments reduce airlines' marginal abatement costs, creating a virtuous cycle of “emission reduction improvement—price increase—demand expansion.” We identify a critical threshold for technology spillover intensity: when spillovers exceed this threshold, ex-ante subsidies achieve higher social welfare and lower marginal abatement costs through vertical coordination effects; conversely, ex-post subsidies demonstrate superior fiscal efficiency. Under unconstrained budgets, ex-ante subsidies eliminate the capital lock-in disadvantage by fully compensating fixed investments, significantly expanding their advantage interval compared to budget-constrained scenarios. This research provides theoretical boundaries for governments to implement differentiated subsidies based on airport technology attributes and fiscal conditions, offering important implications for optimizing carbon abatement policy tools in the aviation sector.