Recently, the interest in market-based measures (MBMs) has become strong. Generally speaking, MBMs can act in two main ways:
- By encouraging the adoption of low-carbon practices through incentive mechanisms.
The former can be pursued through the application of emissions price-control or quantity-control
approaches. Price-control approaches concern bunker levy schemes, such as the carbon tax or the GHG Fund.
Ship-owners and operators pay a fixed levy based on their fuel consumption, and part of this money
can be used to finance future projects for CO2 reduction. Although these types of approaches have a
theoretical efficiency in both economic and environmental terms, they also have the potential risk to
cause the shift from maritime to higher-carbon transport modes and the risk of carbon leakage
[2].
Furthermore, this type of tax can be easily bypassed by taking fuel onboard from countries where it is
not applied
[3].
Emissions quantity-control approaches, such as cap-and-trade programs or emission trading
schemes (ETS), issue a limited number of annual allowances that allow companies to emit a certain
amount of CO2. Once the total cap on emissions is set, companies can trade their unused allowances
or can be taxed if they produce higher emissions than their permits allow. Although
the emission reduction effect of ETS in the short-term is generally taken for granted, some scholars
have demonstrated that this is not always true. The implementation of ETS can even increase CO2
emissions depending on other factors, such as charter rate and bunker price
[4].
At the IMO level, the discussion on the possible adoption of MBMs started in 2010 when an IMO
Expert Group was tasked to evaluate 11 MBM proposals submitted by various Member States and
organizations. In 2013, after three years of work, the MEPC decided to suspend the work of the Group
with nothing done. One of the main obstacles to the progress of the discussion was reported to be the
objection raised by developing countries about the compatibility of MBMs with the “Common But
Differentiated Responsibilities” (CBDR) principle. Another issue of political disagreement was the
way of using the funds raised by the MBM
[5].
No MBM has been applied on an international level so far, and it seems unlikely it will happen
shortly
[6]. However, in the framework of the IMO’s Strategy, the implementation of MBMs seem to
be expected in the long-term
[7].
As for incentive mechanisms, they can take several forms: Favorable tax systems, low-interest
loans for environmentally friendly interventions, the provision of subsidies, etc. Ports have also
recently started implementing initiatives aimed at reducing the amount of maritime in-port emissions
from ships and following a more environmentally caring path
[8][9]. Port initiatives can include
discounts to port fees for ships fulfilling certain environmental criteria or the promotion of effective
voluntary programs to improve air quality surrounding port areas.
Several shipping firms have begun to respond to environmental concerns by voluntarily embracing
green shipping practices (GSPs) to make their operations “greener”. Examples of such practices include
counting the carbon footprint of shipping routes and using alternative transportation equipment
to reduce environmental damage in performing shipping activities.