Market-based approach for improving ship air emissions

Abstract

This study considered how appropriate different market-based approaches are for the reduction of ship air emissions, particularly CO2. Furthermore, the study also considered which types of market-based tools may be available for application to the shipping industry. This project was not intended to design or optimize a system for the maritime community. The study considered the current input and discussions within the International Maritime Organization and its Marine Environment Protection Committee and identified three major thought patterns in proposed systems for the maritime industry: (1) an emissions trading scheme for the shipping industry, (2) CO2 indexing, and (3) alternative approaches. The most significant alternative approach is to place a levy on fuel bunkers. Other alternative approaches could involve hybrid systems using any combination of the other systems mentioned. The study identified a number of unresolved issues and tradeoffs that could hinder the implementation of these systems. These industry-specific issues include technical, policy, administrative, and infrastructure considerations. Currently, there is no consensus on which type of system to use or even whether any of these systems will be used. The study concludes with recommended steps towards emissions management for ship owners and operators.