Designing a Global and Effective Regulatory System to Reduce the CO₂ Emission from International Shipping

Abstract

Noting that the CO₂ emission from international shipping accounts for 3% of the world and continues to increase, global regulatory framework has been under discussion at International Maritime Organisation. This paper analyses regulatory system design to utilise large abatement potential of shipping, in particular, how to set mandatory standards for efficiency of individual ships. As regards Market-Based Measures, this paper argues the merits of leveraged incentive scheme, as a variation of fuel levy, and the necessity of sector-specific target setting based on the efficiency improvement.