How will the marine emissions trading scheme influence the profit and CO2 emissions of a containership

Abstract

Greenhouse Gas (GHG) emissions from international shipping has become an increasing concern to the whole world. Although the shipping industry has not been included in the mandatory GHG emissions reduction list in the Kyoto Protocol, it should do something to cut down its emissions. This paper proposes a marine emissions trading scheme which mainly concerns CO2 and studies its influence on the annual profit and CO2 emissions of containerships based on speed reduction. Through a case study, we demonstrate that speed reduction is really an effective measure in cutting down ship GHG emission. Meanwhile, the auction rate of allowances has a great impact on the annual profit of a ship. Furthermore, the conducted scenario and sensitivity analysis confirm that in different shipping market situations, the ship always has a most profitable speed, no matter what the auction rate is. © 2013 Springer-Verlag.