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.

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