Influence of the European Union (EU) on International Maritime Organization (IMO) about the Market-based Measures on Emissions

Year 2022, Volume: 9 Issue: 3, 146 - 153, 08.09.2022

Levent Kırval Ufuk Yakup Çalışkan

https://doi.org/10.30897/ijegeo.1047467

Cited By: 2

Abstract

Market-based Measures (MBM), a catalyst for new and effective technologies, can be highly rewarding for the shipping industry on its way to reach 50% decarbonization by 2050. To regulate emissions and improve energy efficiency in maritime transportation industry, MBMs are in focal point at the decision-taking level both for International Maritime Organization (IMO) and European Commission (EC). EC included shipping into European Union’s (EU) existing Emission Trading Scheme (ETS). However, IMO’s scheme will be functional after 2023 and decision of an MBM is not finalized yet. The motivation of this paper is to analyze viable MBMs under the Initial IMO Greenhouse Gases (GHG) Strategy based on their superiority and evaluate the influence of EU’s policy implementation on global shipping industry. The issues such as economic implications, feasibility, social and environmental responsibilities, and harmony of the policy are included to the manuscript to assess the success of the MBMs. Main concerns and thoughts revolving around EU ETS; such as economic implications of a taxation, the existence of an administrative body for shipping in EU ETS, carbon leakage caused by high taxation, voyage evasion of emissions by not delivering goods to distant areas, emergence of a fraud-proof and more secure system with an administrative body, success factors of EU ETS after 16 years, full certainty of reducing emissions rather than incentives to reduce emissions, monitoring and reporting schemes; are discussed to bridge the issue with EU’s reasonings.

Keywords

Environmental Protection, European Union, International Maritime Organization, Emission Trading Scheme, Market Based Measures, Decarbonization, Carbon Tax, Bunker Levy

References

• AGF (High-level Advisory Group on Climate Change Financing) Report (2009). Work Stream 2: Paper on Potential Revenues From International Maritime and Aviation Sector Policy Measures. https://www.cbd.int/financial/interdevinno/un-climate-transport.pdf
• Avetisyan, M. (2018). Impacts of global carbon pricing on international trade, modal choice and emissions from international transport. Energy Economics, 76, 532–548. https://doi.org/10.1016/j.eneco.2018.10.020
• Barry Rogliano Salles Shipbrokers. (2021). Shipbuilding: Key Points of 2020. Report.
• BHP Group Limited, DNB BW Group, & Maritime DNV GL. (2019). Carbon Levy Evaluation - Could a carbon levy in shipping be an effective way to help. October, 1–12. CBO. (2008). CBO study on cap and trade (Issue February).
• Chai, K.-H., Lee, X. N., & Gaudin, A. (2019). A Systems Perspective to Market – Based Mechanisms (MBM) Comparison for International Shipping. SSRN Electronic Journal, 1–25. https://doi.org/10.2139/ssrn.3347448
• Christodoulou, A., Gonzalez-Aregall, M., Linde, T., Vierth, I., & Cullinane, K. (2019). Targeting the reduction of shipping emissions to air: A global review and taxonomy of policies, incentives and measures. Maritime Business Review.
• Christodoulou, A., Dalaklis, D., Ölcer, A., & Ballini, F. (2021). Can Market-based Measures Stimulate Investments in Green Technologies for the Abatement of GHG Emissions from Shipping? A Review of Proposed Market-based Measures. Transactions on Maritime Science, 10(1), 1–8. https://doi.org/10.7225/toms.v10.n01.017
• Cristea, A., Hummels, D., Puzzello, L., & Avetisyan, M. (2013). Trade and the greenhouse gas emissions from international freight transport. Journal of Environmental Economics and Management, 65(1), 153–173. https://doi.org/10.1016/j.jeem.2012.06.002 DNV GL. (2021). MRV and DCS. https://www.dnv.com/maritime/insights/topics/MRV-and-DCS/index.html (Accessed at: 30/11/2021). EC. (2021a) Weight of goods handled by EU ports dropped by 7% in 2020 https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20211209-1 (Accessed at: 30/11/2021).
• EC. (2021b). A European Green Deal Striving to be the first climate-neutral continent https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en (Accessed at: 30/11/2021).
• EU. (2015). Regulation 2015/757 of the European Parliament and of the Council of 29 April 2015 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and amending Directive 2009/16/EC.
• Ellerman D., Convery F.J., P. C. D. (2010). Pricing carbon: the European union emissions trading scheme. Cambridge University Press.