International sea transport in 2005 contributed nearly 3% of the global CO2 emissions, with trends showing further increase. The International Maritime Organization (IMO) which regulates international sea transport has as of June 2011 only adopted the energy efficiency design index (EEDI) for newly built ships; further abatement measures, especially economically in nature, are yet to come. Germany has suggested an emissions trading scheme (ETS). The European Union has said it would implement regional measures in case there are no effective international measures in place by the end of 2011; the EEDI alone would not be sufficient.
The goal of this project: Possible regulatory or market-based instruments for climate protection are to be developed further, their emissions abatement potential and regional as well as economic effects are to be examined, according to the current grounds for decisions at the IMO and EU level.
Within the study, there are four main policy options which are discussed and evaluated:
- A compensation fund,
- An emission trading system (ETS),
- A tax on fuel or on emissions,
- A mandatory emission reduction per ship
These policy options are evaluated regarding the following 9 aspects:
- Geographical scope
- Overall emission cap
- Incentive to reduce emissions beyond target
- Quality of offsets
- Modal Shift
- Long term Greenhouse Gas (GHG) reductions
In this paper the impact of these policy options on GHG emissions has been analysed.
The authors of the study conclude that a carefully designed emissions trading scheme (ETS) is the best option from an environmental point of view, mainly because of an overall emission cap.
A target-based compensation fund, which also has an overall emission cap, could be as effective as an ETS. However, fund members would be allowed to choose how they meet the target and would presumably have a certain degree of freedom on the use of offsets. This makes it difficult to assess the instruments and raises the risk of the funds not meeting the target. A thorough design, especially a clear allocation of responsibilities between funds and its members, is therefore crucial.
An emission tax has the advantages of a market based measure and will incentivise emission reductions. However, overall emissions are not capped.
A contribution-based compensation fund could have the same environmental effect as an emission tax. If parts of the emissions were exempted, the environmental effectiveness would of course be less than for an emission tax.
The two options of the mandatory emission reduction per ship have the disadvantage that overall emissions are not capped. Moreover, they can be avoided by ship operators easier than the measures above.
Due to the high risk of avoidance, a bunker fuel tax, which is a very effective policy instrument in cutting GHG emissions if applied on a global scale, is not an effective instrument when applied on a regional scale.
For the instruments that allow for off-setting (other than ETS allowances) it is important to ensure the environmental integrity of the off-sets.
Findings of the study are published in detail by a final report which is available online via the German Environment Agency (UBA): https://www.umweltbundesamt.de/sites/default/files/medien/461/publikationen/4358.pdf