Given that any market-based scheme for shipping would need to be applied globally in order to be effective, its design viability and flexibility should be the key evaluation criteria. The design should accommodate the highly complex and dynamic nature of the shipping industry. The following graph illustrates a comparison of IMERS with a potential cap-and-trade. The hybrid cap-and-levy scheme employed in IMERS:
- Eliminates the three central barriers associated with cap-and-trade (emission baseline, allocation of emissions, and distribution of allowances);
- Reduces the negative impact of several key implementation issues (impact on competition, cost, and set up time);
- Raises value (in terms of effectiveness, flexibility, and scale);
- Redeploys resources saved to create new value (through technology and adaptation financing).