Abstract:

In 2018, the International Maritime Organization (IMO) announced the first sector-wide emission reduction target for international shipping: to limit emissions by at least 50% by 2050 compared to 2008. The roadmap to achieve this goal is the Initial IMO Strategy on Reduction of GHG Emissions from Ships, which proposes implementation measures for the short-term (2018-2023), mid-term (2023-2030) and long-term (beyond 2030). This article examines one of each type of candidate measures, notably National Action Plans, market-based mechanisms and alternative fuels, all of which are central to the implementation of the Initial Strategy due to their significant practical impact. We argue that National Action Plans, although not a suitable tool to tackle ‘international’ shipping emissions, can play a key role in mobilizing capacity and resources, and directing national action. In relation to market-based mechanisms, we find that a carbon tax might be a more efficient way to incentivize emissions reductions, when compared to emissions trading. Yet ultimately, the sector’s decarbonization can only be truly achieved with zero-carbon fuels that are safe for human health and the environment. We explore the considerable barriers to the development and use of these fuels and consider how leading shipping companies and financial sector are beginning to shift capital and resources to this challenge, spurred by the new IMO targets and understandings of climate-related financial risks and opportunities.

Additional Information: NUS Law Working Paper No. 2020/013