Securing Advantages to Shipping and World Trade

The shipping industry demands that a maritime MBM should be proportional to similar measures taken in other industries, including other modes of transport. One approach to delivery proportionality would be to ensure that shipping is subject to the same carbon price as other industries, on average. This could be achieved by linking the maritime MBM to an economy-wide reduction scheme or schemes. The additional benefit of such price linkage would be that a global emission reduction target for international shipping (cap) would not be required, eliminating the contentious issue of setting such a cap.

Providing that shipping is subject to the same carbon price as other sectors, the negative impact on the volume of seaborne trade would be marginal, if any (before any improvements are considered). Even though shipping is the most cost and energy efficient mode of transport, it has a significant potential to increase its energy efficiency further (IMO 2009). Furthermore, the greatest scope for efficiency improvements is in the supply chain to and from developing countries, including trade facilitation. Due to incentives from the MBM, and additional investments, the cost of transport for developing countries would be reduced most, contributing positively to their increased trade and development.

To further increase benefits to the most vulnerable developing countries, including the Small Island Developing States (SIDS), the application threshold for an MBM could be set at a level higher than 400 gross tonnage (GT), for instance at 4,000 GT, at least initially. This would practically exclude the majority of all ships serving the remote SIDS, as their ports typically can receive only smaller ships (Faber and Rensma 2008).

Increasing the application threshold from for instance 400GT to 4,000GT would accelerate the MBM implementation, by significantly reducing the number of ships subject to the instrument without necessarily having a major effect on emissions – it is estimated that the total emission coverage would only reduce by 9%. Therefore, the initial coverage of emissions from international shipping would remain relatively high at 91%, when compared with the emissions coverage for ships of 400 GT and above. The number of ships subject to MBM would be nearly halved in this initial period, given that the total number of ships over 400 GT and 4,000GT in 2010 was approximately 43 and 24 thousand, respectively (for other thresholds see IMO 2010c).