The use of economic instruments in the shipping sector

Published on
March 20, 2017

Two new publications from ENP colleagues Judith van Leeuwen and Kris van Koppen discuss the use of economic instruments in the shipping sector. The CO2 emission from the global shipping sector are excluded from the Paris Agreement. Instead the International Maritime Organization is considering economic instruments such as a levy or a cap-and-trade system for reducing CO2 emissions from shipping (in addition to technical and operational measures). In the 2 publications, Judith and Kris discuss the potential effectiveness of these economic instruments from a company perspective. The crisis-oriented nature of most ship-owning companies is an obstacle to the effective use of economic instruments as such companies usually only respond to governmental regulation. In addition to economic stimuli, more data is needed about the actual CO2 emissions from individual ships. Also, more pressure from consumers or cargo-owners to become sustainable as well as investments in technological innovation to support the transition to renewable energy are needed.