Understanding the Economic Impacts of Greenhouse Gas Mitigation Policies on Shipping: What Is the State of the Art of Current Modeling Approaches?
... A working paper of the World Bank Group [74] investigates the economic impacts of various GHG mitigation measures on states, using model-based analysis. Specifically, the results of the analysis show that the enforcement of GHG mitigation measures will raise transportation costs and import prices of goods, and will minimize the number of commodities traded internationally. ...
... Fuel Levy and variants [19,40,[50][51][52][53][54][55][56][57][58][59]68,[72][73][74][75] Emission Trading System (ETS) and variants [19,50,51,[59][60][61]64,66,67,[69][70][71][72][73][74][75][76] The Initial IMO Strategy sets substantial emissions reduction targets and depicts the eager vision of the Industry towards a decarbonized future. The essential tools for achieving these goals are described as "candidate short-, mid-, and long-term measures." ...
... Fuel Levy and variants [19,40,[50][51][52][53][54][55][56][57][58][59]68,[72][73][74][75] Emission Trading System (ETS) and variants [19,50,51,[59][60][61]64,66,67,[69][70][71][72][73][74][75][76] The Initial IMO Strategy sets substantial emissions reduction targets and depicts the eager vision of the Industry towards a decarbonized future. The essential tools for achieving these goals are described as "candidate short-, mid-, and long-term measures." ...
This paper aims to conduct an updated literature survey on the Market-Based Measures (MBMs) currently being proposed by various member states and organizations at the International Maritime Organization (IMO) or by the scientific and grey literature as a cost-effective solution to reduce greenhouse gas (GHG) emissions from ships. Τhe paper collects, summarizes, and categorizes the different proposals to provide a clear understanding of the existing discussions on the field and also identifies the areas of prior investigation in order to prevent duplication and to avoid the future discussion at the IMO to start from scratch. Relevant European Union (EU) action on MBMs is also described. Furthermore, the study identifies inconsistencies, gaps in research, conflicting studies, or unanswered questions that form challenges for the implementation of any environmental policy at a global level for shipping. Finally, by providing foundational knowledge on the topic of MBMs for shipping and by exploring inadequately investigated areas, the study addresses concrete research questions that can be investigated and resolved by the scientific and shipping community.
... Another key issue is the high costs associated with decarbonization. The transition to greener shipping practices is expected to entail significant costs, which may be passed on to consumers through increased trade and transportation costs [6]. In order to facilitate a sustainable and equitable transition, it is imperative for governments and international bodies to provide financial incentives and support to companies committed to the process of reducing carbon emissions. ...
... Modular containers proposed by Montreuil et al. [31] could potentially serve as a solution to this problem. (6) Other key issues that have emerged are those related to ocean biodiversity. The ocean is the planet's largest carbon sink, absorbing excess heat and energy released by rising GHG emissions. ...
... Evidence shows that the GHG levy could significantly impact transport costs and emissions. A carbon tax of $40-$50 per ton of CO 2 could increase the costs of maritime transport by 16-17% [18,39]. [39] calculate that the same carbon levy can reduce transport GHG emissions by 7%. ...
... Under this policy, the results indicate that many alternative fuels become feasible relatively early, especially from 2035 onward, enabling early-stage adoption of new fuels. Considering that fuel costs represent approximately one third of total transport costs, the cost increase we calculate is in line with others in the literature, such as [18,39]. ...
Maritime transport accounts for approximately 3% of global greenhouse gas (GHG) emissions with the sector aiming to achieve net zero by or around i.e. close 2050. There has been intense debate on medium-term measures that combine regulatory frameworks with financial incentives or economic penalties. Among the main proposals under discussion are a GHG levy, two flexible mechanisms (FCMs) based on the GHG Fuel Intensity (GFI) and a feebate. Despite extensive discussions on carbon levies, there is a notable lack of studies comparing the cost-effectiveness of these different GHG reduction measures in the maritime sector. This study aims to fill this gap by developing a comprehensive methodology to evaluate and compare these GHG policies. Using cost-effectiveness and multi-criterion decision analysis (MCDA), the study assesses the technical feasibility, economic implications, and environmental benefits of the proposed measures. The main quantitative results reveal that a GHG levy starting at $100 per ton of CO2 doubles fuel costs, while new fuels become economically attractive only after 2040 under the feebate mechanism. Both original and revised FCM proposals show similar cost patterns, with the revised FCM leading to earlier adoption of new fuels. We find that the FCMs and the carbon levy are effective in achieving the IMO's final and intermediate targets. However, FCMs are the most cost-effective proposals, achieving targets with the lowest present value of costs and the cost per avoided GHG emissions. The proposed methodology provides a robust framework for facilitating objective and structured discussions with stakeholders, helping to balance economic and environmental goals in maritime policymaking.
... General estimates provided by Krammer and Smith (2017) are that a carbon price at USD 25 per tonne of fuel may induce a drop in real income equivalent to USD 16 per capita in New Zealand, and to 0.038% for the national GDP. In a World Bank research paper by Halim et al. (2019) on the economic impact of shipping GHG mitigation policies, a carbon price at USD 10-50 per tonne of carbon would have a limited impact on transport costs (0.4% to 16%), on national economies and on import prices (<1%). Our analysis on the impact of a maritime EU ETS suggests that it may have a higher impact on trades than findings from Halim et al. (2019). ...
... In a World Bank research paper by Halim et al. (2019) on the economic impact of shipping GHG mitigation policies, a carbon price at USD 10-50 per tonne of carbon would have a limited impact on transport costs (0.4% to 16%), on national economies and on import prices (<1%). Our analysis on the impact of a maritime EU ETS suggests that it may have a higher impact on trades than findings from Halim et al. (2019). For instance, for a Very Large Crude Carrier (VLCC) and for an allowance price at USD10 tonne carbon credit level, it would induce an additional cost of USD 77,525 per voyage which is about 8.4% of VLCC voyage earnings 9 . ...
Maritime transportation will be included in 2022 into the European Union Emission Trading System (ETS). There is however a limited knowledge on the impact of this inclusion for shipping markets and operators; and on whether it can bring enough incentives for carbon abatement measures. We contribute to this debate in developing a methodology to assess these impacts. Our method is applied to a sample of over 38,000 European voyages carried out by oil tankers from 2017 to 2019, during which an estimation of 60 million tonnes of CO2 were generated by EU-related voyages. With a carbon allowance price at USD 10–50 per tonne, we estimate that the industry could contribute up to 0.3–1.4 billion USD per year. We show that even with a low price, the ETS provides sufficient incentives for specific abatement measures, and in particular, for wind-assistance technologies.
... A low levy ($25/tonne of CO2) is expected to have a small impact on commodity prices (AGF, 2010). Halim, Smith and Englert (2019) find that a carbon price in the range of US$10 -50/tonne of CO2 would increase maritime transport costs by only 0.4 -16%, so the impact on transport mode choices would be minimal. Also, the impact on countries' GDPs would be minor, with a carbon price of US$90/ tonne of CO2 having an effect of -0.002% of GDP for large developing countries. ...
... Also, the impact on countries' GDPs would be minor, with a carbon price of US$90/ tonne of CO2 having an effect of -0.002% of GDP for large developing countries. Comparatively, a US$30/ tonne of CO2 could have an economic impact of -1% of GDP for a remote small island developing state (Halim, Smith and Englert, 2019). ...
... A low levy ($25/tonne of CO2) is expected to have a small impact on commodity prices (AGF, 2010). Halim, Smith and Englert (2019) find that a carbon price in the range of US$10 -50/tonne of CO2 would increase maritime transport costs by only 0.4 -16%, so the impact on transport mode choices would be minimal. Also, the impact on countries' GDPs would be minor, with a carbon price of US$90/ tonne of CO2 having an effect of -0.002% of GDP for large developing countries. ...
... Also, the impact on countries' GDPs would be minor, with a carbon price of US$90/ tonne of CO2 having an effect of -0.002% of GDP for large developing countries. Comparatively, a US$30/ tonne of CO2 could have an economic impact of -1% of GDP for a remote small island developing state (Halim, Smith and Englert, 2019). ...
Investigation of various market based mechanisms for putting a price on international shipping emissions.
... This paper contributes to the IMO's discussion on medium-term measures by providing a comprehensive comparative analysis of the environmental and economic impacts of the proposals from member states using the general equilibrium GTAP model. While much of the existing literature focuses on carbon taxation within the maritime sector [5][6][7][8], our approach evaluates a broader range of policy measures and their economic implications. Moreover, this study highlights the value of general equilibrium models in climate policy analysis, particularly their ability to capture indirect impacts and price adjustments post policy implementation [9]. ...
Maritime transport carries over 80% of global trade by volume and remains the most energy-efficient mode for long-distance goods movement. However, the sector contributes approximately 3% of global Greenhouse Gas (GHG) emissions, a share that could rise to 17% by 2050 without effective regulation. In response, the International Maritime Organization (IMO) has introduced initial and short-term measures to enhance energy efficiency and reduce emissions. In 2023, IMO Strategy expanded on these efforts with medium-term measures, including Market-Based Mechanisms (MBMs) such as a GHG levy, a feebate system, and fuel intensity regulations combined with carbon pricing. This study evaluates the economic and environmental impacts of these measures using an integrated computational simulation model that combines Ocean Engineering and Economics. Our results indicate that all proposed measures support the IMO’s intermediate emission reduction targets through 2035, cutting absolute emissions by more than 50%. However, economic impacts vary significantly across regions, with most of Africa, Asia, and South America experiencing the greatest adverse effects on GDP and trade. Among the measures, the GHG levy exerts the strongest pressure on economic activity and food prices, while a revised fuel intensity mechanism imposes lower costs, particularly in the short term. Revenue redistribution mitigates GDP losses but does so unevenly across regions. By leveraging a general equilibrium model (GTAP) to capture indirect effects often overlooked in prior studies, this analysis provides a comprehensive comparison of policy impacts. The findings underscore the need for equitable and pragmatic decarbonization strategies in the maritime sector, contributing to ongoing IMO policy discussions.
... This paper contributes to IMO's discussion on medium-term measures by providing a comprehensive comparison of the environmental and economic impacts of the proposals from member states, employing a general equilibrium model, GTAP, while existing literature focuses on carbon taxes within the maritime sector [4][5][6][7]. Moreover, this study highlights the importance of general equilibrium models in climate policy analysis, as they capture indirect impacts and price adjustments post-policy implementation [8]. ...
Maritime transport handles over 80% of global trade by volume and remains the most energyefficient mode for long-distance goods movement. However, the sector contributes approximately 3% of global greenhouse gas (GHG) emissions, a share projected to rise to 17% by 2050 if left unregulated. In response, the International Maritime Organization (IMO) has implemented initial and short-term measures to enhance energy efficiency and reduce emissions. The 2023 IMO Strategy further introduces medium-term measures, including market-based mechanisms (MBMs) such as a GHG levy and fuel intensity regulations. This study evaluates the economic, and environmental impacts of these measures using an integrated computational simulation model combining Ocean Engineering and Economics. Our results indicate that all proposed measures align with IMO’s emission reduction intermediate targets through 2035, reducing absolute emissions by more than 50%. However, economic impacts vary significantly across regions, with North Africa, Eastern Africa, Western Africa, and South Asia experiencing the most adverse effects on GDP and trade. Among the measures, the GHG levy has the strongest economic and food price impacts, whereas a revised fuel intensity mechanism imposes lower costs, especially in the short-term. Revenue redistribution mitigates GDP losses but with uneven regional benefits. This study contributes to IMO discussions by providing a comprehensive comparison of policy impacts, leveraging a general equilibrium model (GTAP) to capture indirect effects often overlooked in prior studies. The findings underscore the need for equitable and feasible decarbonization strategies in the maritime sector.
... For instance, Hoang and Pham [22] examined the environmental impact assessment and emission reduction strategies in the maritime transportation field. Halim et al. [23] concentrated on the broader economic impacts of decarbonizing shipping. ...
The International Maritime Organization (IMO)’s annual operational carbon intensity index (CII) rating requires that from 1 January 2023, all applicable ships meet both technical and operational energy efficiency requirements. In this paper, we conduct a comparative study of different alternative fuel options based on a CII model from the perspective of shipowners. The advantages and disadvantages of alternative fuel options, such as liquefied natural gas (LNG), methanol, ammonia, and hydrogen, are presented. A numerical example using data from three China Ocean Shipping (Group) shipping lines is analyzed. It was found that the overall attained CII of different ship types showed a decreasing trend with the increase of the ship’s deadweight tonnage. A larger ship size choice can obtain better carbon emission reduction for the carbon emission reduction investment program using alternative fuels. The recommended options of using LNG fuel and zero-carbon fuel (ammonia and hydrogen) on Route 1 and Route 3 during the study period were analyzed for the shipowners. Carbon reduction scenarios using low-carbon fuels (LNG and methanol) and zero-carbon fuels (ammonia and hydrogen) on Route 2 are in line with IMO requirements for CII.
... Moreover, according toSheng et al. (2017) andDong et al. (2022), unilateral regulations may actually increase total emissions, whereas unified regulations consistently reduce overall emissions. Nevertheless, the impact of carbon pricing on transport costs, particularly in developing countries, small island developing states, and least developed countries, is a critical area of study(Rojon et al., 2021;Halim et al., 2019). The IMO (2019) Initial Strategy also lists transport costs as one of eight factors impact assessments should pay attention to. ...
The maritime industry faces intense scrutiny to address climate change amid strict environmental regulations and societal expectations. The paper mainly focuses on understanding and evaluating the key factors driving the transition toward decarbonization in shipping. The study utilized qualitative analysis, focusing on reviewing current environmental targets set by major regulatory bodies, notably the International Maritime Organization (IMO) and the European Union (EU). The study concludes that a clear strategy for reducing emissions is essential, and a ho-listic approach must be adopted. Thus, the investigation identified several critical factors that can facilitate the creation of an effective strategy to achieve net zero emissions, comply with regulatory goals, and reduce current emissions. They are decarbonization levels (solutions), ecosystem (value chain), and drivers (enablers), collectively referred to as the decarbonization LED model.
... In the EU, the increase in production price (0.02%) is more than the increase in consumption price (0.004%) as depicted by the CPI. This trend is underscored in a World Bank study by Halim et al. (2019), where GHG mitigation policies in the shipping industry led to a notable increase in maritime transportation costs that ranged from 0.4% to 16%. Simultaneously, the uptick in import prices is marginal (below 1%). ...
In 2021, the European Commission introduced the ‘Fit for 55’ package, a set of policies aimed at reducing greenhouse gas (GHG) emissions by at least 55% by the year 2030. This initiative, aligned with the European Green Deal, seeks to make Europe a climate-neutral continent by 2050. A pivotal aspect of ‘Fit for 55’ is the proposed extension of the European Union Emissions Trading System (EU ETS) to the shipping industry. According to the European Commission, water transport accounts for 2.5% of global GHG emissions, while the shipping industry accounts for 13% of the EU’s GHG emissions from transportation.
This stringent new shipping policy makes it imperative to determine how the world’s economy will respond, considering three distinct implementation proposals with different rates of policy introduction. Evaluating the short-term impacts of the policy is crucial to ensuring that the sustainability initiative is not only ambitious but also pragmatic and adaptable to the realities. To assess the implications, this paper uses the Leontief price model, the environmental input–output (EIO) model, and the OECD Inter-Country Input-Output (ICIO) Table for 2018, which contains information for 45 sectors. The focus is on EU countries and its Top 10 Trading Countries.
Our findings show that a short-term trade-off exists between economic and environmental goals and that environmental gains incur economic losses for key stakeholders. They also show that the impact of this policy is felt more by producers in the EU and consumers in non-EU countries than by other agents in the respective countries. Lastly, a recommendation from our study is that the policy should be phased in progressively to provide economic agents with the necessary adjustment time and thus minimize economic losses.
... Of these, China could experience the highest real GDP loss of all countries with a reduction of roughly 0.02% (assuming a carbon charge of 90 USD per ton). Halim et al. [39] concluded that the introduction of a carbon price of 10 to 50 USD per ton of CO 2 for bunker fuel could increase the cost of shipping by 0.4% to 16%. However, this would only slightly increase the import price of goods (less than 1%), and the impact on the national economy was expected to be small (−0.002% to 0.5% of GDP). ...
Greenhouse gas (GHG) emissions in shipping have been receiving growing concerns in the maritime industry. Recently, the International Maritime Organization (IMO) is considering the introduction of a global shipping carbon tax, which has become the most talked-about topic in both industry and academia. To assess the potential impact of the carbon tax on maritime trades, a trade-volume-based model of shipping carbon emissions was developed. Considering that bulk shipping is the second-largest carbon emitter in the maritime industry and the low value-to-weight nature of bulk cargoes, the model was applied to analyze the dry bulk trade in China, one of the leading countries in the global dry bulk trade. The results show that the introduction of the carbon tax could have significant impacts on freight rates and commodity prices. Depending on the trading regions and the carbon charges, shipping freight rates would increase by 10–30%, which is equivalent to 1–4% of the trading prices. Additionally, since shorter shipping distances may have less emission per trading tonnage, the shipping carbon tax may significantly change the dry bulk trade patterns, resulting in China’s increasing reliance on nearby countries, e.g., India and Australia, for the import of key commodities. These findings can help shipping companies and sectors make better carbon reduction responses, such as redeploying their fleets, promoting the development of low-carbon shipping technologies, and increasing investments in Australia, as well as South and Southeast Asia.
... Bunker fuels with zero-carbon emissions, such as biofuels, hydrogen and ammonia, as well as synthetic carbon-based fuels, contribute to the modernization of the domestic energy and industrial infrastructure [70]. Solutions such as carbon prices applied to bunker fuel in the range of USD 10-50/tonne of carbon dioxide can increase the cost of sea transportation by 0.4-16% [80]. Residential rooftop photovoltaic (PV) systems can solve the problem of increasing electricity demand for sustainable energy systems [81]. ...
The Paris Climate Agreement and the 2030 Agenda for Sustainable Development Goals declared by the United Nations set high expectations for the countries of the world to reduce their greenhouse gas (GHG) emissions and to be sustainable. In order to judge the effectiveness of strategies, the evolution of carbon dioxide, methane, and nitrous oxide emissions in countries around the world has been explored based on statistical analysis of time-series data between 1990 and 2018. The empirical distributions of the variables were determined by the Kaplan–Meier method, and improvement-related utility functions have been defined based on the European Green Deal target for 2030 that aims to decrease at least 55% of GHG emissions compared to the 1990 levels. This study aims to analyze the energy transition trends at the country and sectoral levels and underline them with literature-based evidence. The transition trajectories of the countries are studied based on the percentile-based time-series analysis of the emission data. We also study the evolution of the sector-wise distributions of the emissions to assess how the development strategies of the countries contributed to climate change mitigation. Furthermore, the countries’ location on their transition trajectories is determined based on their individual Kuznets curve. Runs and Leybourne–McCabe statistical tests are also evaluated to study how systematic the changes are. Based on the proposed analysis, the main drivers of climate mitigation and evaluation and their effectiveness were identified and characterized, forming the basis for planning sectoral tasks in the coming years. The case study goes through the analysis of two counties, Sweden and Qatar. Sweden reduced their emission per capita almost by 40% since 1990, while Qatar increased their emission by 20%. Moreover, the defined improvement-related variables can highlight the highest increase and decrease in different aspects. The highest increase was reached by Equatorial Guinea, and the most significant decrease was made by Luxembourg. The integration of sustainable development goals, carbon capture, carbon credits and carbon offsets into the databases establishes a better understanding of the sectoral challenges of energy transition and strategy planning, which can be adapted to the proposed method.
... Halim et al. [5] identify four different but interrelated areas of economic impact that could result from introducing maritime GHG mitigation measures such as carbon pricing: transport costs; transport choices; import prices; and international trade and economies of Member States. The IMO Initial Strategy also lists transport costs as one of eight factors impact assessments should pay attention to costs (fuel substitution) and long-run marginal costs (technology investment) to achieve deeper CO2 emissions reductions. ...
... A 2018 industry survey found that 75% of industry agreed that a carbon price was needed but that they would only be willing to pay a maximum of 50 USD per tonne of CO 2 (Lloyd's Register and University Maritime Advisory Services, 2018). According to the World Bank, a carbon tax of 10-50 USD per tonne of CO 2 would potentially increase shipping costs by between 0.4-16 per cent, but only increasing the final goods price by less than 1 per cent (Halim et al., 2019). Therefore, industry actors support a price but only one that would produce less than 1% change in the overall price of the goods thus not high enough to cause any change in behaviour, surely a logical contradiction in a supposedly Pigouvian tax. ...
This paper questions the dominance of market-based mechanisms (MBMs) as the primary means of climate change mitigation. It argues that, not only they are unsuccessful on their own terms, but also they actually make the task more difficult by the unintended consequence of normalising the act of polluting and crowding out alternatives. The theoretical contribution of the paper is to draw a link between two bodies of literature. The first is the business ethics literature on the dominance of market-based rather than direct regulation, and the second is the literature on market ethics, particularly the work of Michael Sandel on how MBMs crowd out non-market norms. The empirical contribution is to use the international maritime transport sector to illustrate the way market-based regulation renders alternatives such as direct regulation and supply-side approaches invisible.
... A survey by Lloyd's Register and University Maritime Advisory Services (2018) has shown that a tax of 50 USD per tonne of CO 2 was the maximum level industry was prepared to condone. The World Bank calculated that this level of tax could result in an increase in shipping costs of up to 16%, and less than 1% on the final price of the goods (Halim et al. 2019). Yet, the 2021 rate increases, in the order of several hundred percent, have enabled record industry profits without reducing demand. ...
This paper considers two current challenges in the governance of maritime transport, specifically container shipping. The first is the oligopolistic market structure of container shipping, the downsides of which became evident during the COVID-19 pandemic. The second challenge is climate change, both the need to reduce emissions to zero by 2050 and to adapt to effects that are already locked in. The paper reviews the academic and policy literature and unveils a link between these market and environmental challenges which result from a focus on efficiency without considering negative effects such as diseconomies of scale and induced traffic, leading to a continued rise in total industry carbon emissions. The review likewise identifies links in how policy-makers react to the two challenges. Regulators could remove anti-trust exemptions from carriers, and policy-makers are being pushed to provide strict decarbonisation targets with a coherent timeline for ending the use of fossil fuels. Recent thinking on ecological economics, degrowth and steady-state economics is introduced as the paradigm shift that could link these two policy evolutions.
... On average, the share of maritime transport costs in landed import prices is 5 percent for manufactured products, 11 percent for agricultural products, and 24 percent for industrial raw materials (OECD 2011). A review byHalim, Smith, and Englert (2019) suggests that a carbon levy of $10-$50 per ton would increase maritime transport costs by 0.4-16 percent and, in most cases, increase the price of landed imports by less than 1 percent. ...
The International Maritime Organization has pledged to reduce carbon emissions from the shipping industry by at least 50 percent below 2008 levels by midcentury. The next step is to design a strategy for implementing this commitment. A carbon levy for international maritime fuel is a critical component of this strategy because it provides across-the-board incentives for near-term mitigation, the robust price signal that is ultimately needed for deploying zero-emission vessels (ZEVs), and near-term funding for R & D and infrastructure investment for ZEVs. This article discusses the rationale for an international maritime carbon levy, key design and implementation issues, and the environmental impacts of such a levy.
... Their simulations provide a range of results with respect to carbon emissions by 2050, depending on carbon pricing and the scope for fuel switching. Halim et al. (2019) conclude that a carbon tax up to $50 is likely to have only a small impact on trade (less than 1%). None of the referenced studies provides an econometric analysis of relationships between bunker costs and maritime fuel consumption, nor consider heavy traded goods in particular, which are our targets here. ...
A R T I C L E I N F O JEL classification: F14 F18 F64 H23 H87 Q54 Q56 Keywords: CO 2 emissions Maritime trade Carbon taxation Feebate A B S T R A C T We study the impacts of carbon taxation of international transport fuels on CO 2 emissions and trade activity, focusing on maritime transport, which constitutes the most important international trade transport activity. Our estimated bunker price elasticities range from − 0.03 to − 0.42. For the current level of international trade, a global tax of US$ 40 per ton of CO 2 will reduce CO 2 emissions by 7.65% for the heaviest traded products (at the 6-digit HS level of aggregation) transported by sea. The greatest CO 2 emission reductions are for products with relatively low value-to-weight ratios such as fossil fuels and ores. Using our estimates, we present a plan with a gradual increase in the carbon tax, including some transition to zero emissions vessels, for reaching the emissions target of the International Maritime Organization by 2050. We compare the reduction in CO 2 emissions with a carbon tax policy with CO 2 reductions with a feebate policy.
... Halim et al. [33] identify four different but interrelated areas of economic impact that could result from introducing maritime GHG mitigation measures such as carbon pricing: transport costs; transport choices; import prices; and international trade and economies of Member States. The IMO Initial Strategy also lists transport costs as one of eight factors impact assessments should pay attention to [41]. ...
We provide an in-depth review of the extant literature on the impact a maritime carbon pricing measure might have on maritime transport costs. First, we analyse the relative importance of the determinants of maritime transport costs for trade and economic development, and secondly assess the transmission channels and economic effects of a carbon price on maritime transport costs. We argue that the introduction of a carbon price has a limited impact on total maritime transport costs for the average country. However, Small Island Developing States and Least Developed Countries are more likely to be negatively impacted by such a measure in terms of maritime transport costs as we provide novel evidence that the relationship between per unit transport costs and trade flows is negative and elastic at least for the case of Pacific Small Island Developing States.
... Das and Jharkharia 2018, for a review of these studies). Predictive evaluation studies have been presented at various levels of aggregation, including urban (Anand 2015;Waisman et al. 2013;Marcucci et al. 2018;Cheng et al. 2015), corridor (Winebrake et al. 2008;Zhang 2013), (inter)national (Piattelli et al. 2002;Raha et al. 2003;De Bok et al. 2019) and global level (Lee et al. 2013;Tavasszy et al. 2016;Halim et al. 2019). These used different types of models, falling largely into two categories: transport network models (including mode choice) and spatial/sectoral-economic interaction models (a gravity or CGE type approach). ...
In this chapter, the location problem of bioethanol distribution centers is investigated based on two objectives. While the first objective is to maximize the overall utility of the selected places, the second objective is to minimize the cost allocated to establishing the distribution centers. To solve the problem, a hybrid methodology consisting of the best-worst method (BWM) and a set covering model is proposed. BWM is employed to calculate the overall utility of candidate places, and the set covering model is used to select the minimum number of places. By employing the methodology, the selected distribution centers cover the demand of customers within a specific radius. To calculate the overall utility of the candidate places using BWM, a comprehensive framework of sustainability criteria is presented. The proposed framework is formed by criteria extracted from studies which have employed multi-criteria decision-making methods to solve the location problem of distribution centers in different industries. The result of BWM in the proposed methodology is employed as a parameter in the utility function of the set covering model. To solve the model, Lp-metric is suggested. The performance of the proposed methodology is evaluated by a set of data collected from Iran. The proposed hybrid methodology can also be used for locating distribution centers in other industries.
... The paper discussed the case for the tax over alternative mitigation instruments, options for the practical design issues, and then presented estimates of the impacts of carbon taxation and other instruments from an analytical model of the maritime sector. Halim et al. (2019) reviewed research on the economic impacts of GHG mitigation measures on states, using model-based analysis. Specifically, the paper identified four areas of economic impacts and their relationships, compiled the latest findings on the estimated magnitudes of these impacts, and presented relevant modelling approaches. ...
The purpose of this paper is to describe the impact assessment of a mandatory operational goal-based short-term measure to reduce green house gas (GHG) emissions from ships. The specific measure has been proposed by Denmark and other co-sponsors in the context of the relevant discussion at the International Maritime Organization (IMO) and in particular the so-called Initial IMO Strategy. The IMO is a specialized United Nations agency that regulates shipping. The Initial IMO Strategy, adopted in 2018, has been the most recent major international environmental agreement on how to reduce GHG emissions from ships at a global level. The central research question in this paper is to ascertain the potential impacts of the aforementioned measure to least developed countries (LDCs) and small island developing states (SIDS). There are concerns that such states may be negatively impacted, or even disproportionately negatively impacted, by whatever measure is decided by the IMO. After gaps in the literature and data are identified, our methodology develops a list of potential negative impacts, and looks at a set of factors that may influence these impacts. Then, we discuss how the goal-based measure may impact LDCs/SIDs as regards each of the identified negative impacts. The analysis argues that for LDCs and SIDS a risk for negative and disproportionately negative impacts exists. The only negative impact of which both the probability and the consequence are considered high is the difficulty to finance retrofitting of old ships or investment in new ships. As such, this is likely a disproportionally negative impact. At the same time, the degree of share (or responsibility) of the goal-based measure with respect to such potential negative impacts, vis-à-vis the share of other factors contributing to these impacts, cannot be precisely ascertained, even though we conjecture this share to be low.
... However, the quality data on these factors are either not available or inaccessible. Existing data quality is improving though (Halim et al., 2019). For bulk shipbuilding order forecasting model, it is important to focus on the balancing factors of demand and supply sides of the market that forms the core part of the newbuilding activity (Stopford, 2009). ...
Purpose
Bulk shipping mostly facilitates the smooth flow of raw materials around the globe. Regardless, forecasting a bulk shipbuilding orderbook is a seldom researched domain in the academic arena. This study aims to pioneer an econophysics approach coupled with an autoregressive data analysis technique for bulk shipbuilding order forecasting.
Design/methodology/approach
By offering an innovative forecasting method, this study provides a comprehensive but straightforward econophysics approach to forecast new shipbuilding order of bulk carrier. The model has been evaluated through autoregressive integrated moving average analysis, and the outcome indicates a relatively stable good fit.
Findings
The outcomes of the econophysics model indicate a relatively stable good fit. Although relevant maritime data and its quality need to be improved, the flexibility in refining the predictive variables ensure the robustness of this econophysics-based forecasting model.
Originality/value
By offering an innovative forecasting method, this study provides a comprehensive but straightforward econophysics approach to forecast new shipbuilding order of bulk carrier. The research result helps shipping investors make decision in a capital-intensive and uncertainty-prone environment.
... Although global trade models are widely available, these do not explain changes in spatial patterns of manufacturing or transport. Recently, new models have become available for global transport flows (see Halim et al., 2019 for an overview). These have several shortcomings, however, including limited integration with spatial economic models. ...
Logistics processes underlying freight transport are changing rapidly, driven by progress in information technology and an unparalleled growth of consumer involvement in supply chains. This development is also driving change in freight transport flows, by all modes of transport. We argue that an understanding of logistics innovations is a prerequisite for effective explorations of future freight flows and design of transport policies. Our main objective is to review these innovations and derive needs for research into freight modelling. We focus on 3 basic dimensions of model improvement: the structural elements of the system that are modelled, the functional relations between these elements, and the dynamic properties of models.
Decarbonization is the most urgent task for the shipping industry. The International Maritime Organization, which makes the rules for shipping companies, has strengthened their carbon emissions regulation in order to reduce emissions to 70% of 2008’s carbon emissions by 2050. However, 75% of the existing fleet cannot satisfy this carbon emission regulation. The building of new vessels makes it possible to reduce carbon emissions and satisfy this regulation through adopting eco-friendly propulsion methods, such as LNG, ammonia, and methanol propulsion. However, the existing vessels on the sea find it difficult to dock and change their propulsion equipment. This research aims to propose a novel voyage operation method—a just-in-time arrival policy—that converts vessels’ waiting time into voyage time. The proposed method can reduce carbon emissions without propulsion system alteration and expand a vessel’s lifespan, thus satisfying carbon regulations. The carbon intensity indicator, invented by the IMO to regulate vessel carbonization, assesses the quantity of reduced carbon emissions. This research investigated the variation in the carbon intensity indicators of vessels when the just-in-time arrival policy was applied through studying an actual vessel’s arrival and departure dates at the Pusan International container terminal. According to the results of our analysis, ship carbon emissions decreased by an average of 45.8%, and by a maximum of 91%, compared to the levels before applying the proposed method. In addition, 87.0% of vessels obtained a carbon intensity indicator rank improvement and expanded the period that can satisfy the carbon intensity regulation by an average of eleven years and a maximum of twenty-seven years through applying the proposed just-in-time arrival policy. Additionally, the improvement effect of the carbon intensity rank positively correlates with ship size and waiting time at the port.
Market-based Measures (MBM) are deemed one of the feasible methods to achieve sustainable maritime transportation in the mid-term by International Maritime Organization (IMO). Recently, shelved discussions of MBMs reopened at the Marine Environment Protection Committee’s 76th meeting to possibly apply to shipping operators after European Commission decided on including shipping in Emission Trading Scheme (ETS). This chapter will go over the proposed candidate MBMs and address the possible drawbacks of each emission reduction scheme. Included are background information, a comparison of MBMs, an illustration of the impact of carbon pricing and fuel levies on shipping operators, and policy improvements. Assessment made on their effectiveness considering their harmony to the existing legal framework, availability of the implementation in terms of time windows, impact on various states in terms of development and geographical disadvantages, administrative burden, practical feasibility, and impact on the profitability. Outcomes interpreted over today’s conditions are listed. Within these possibilities, the best MBM scenarios have been tried to be drawn. As a result of the interpretation, medium-level levy and low-to-medium-level ETS were the most reasonable options based on the literature. Levy and ETS are the most important among MBMs. In addition to this, levy still has a significant advantage over ETS.KeywordsMarket-based measuresCarbon taxBunker levyEmission trading schemeCarbon pricing
The International Maritime Organization (IMO) has recently adopted short-term measures introducing technical standards for existing ships and a labeling system reflecting their operational carbon intensity. This paper investigates the relevant techno-economic implications from a shipowner's perspective and estimates the effect of six compliance options on six sample containerships. The study applies a new evidence-based bottom-up approach, and the results show that compliance, when possible, is not straightforward and costly. Engine power limitation is the most cost-effective option, but low power limits can lead to substantially increased sailing times (up to 793.92 h/year), which can be prohibitive. The option favors older ships with oversized engines as its effectiveness is mainly determined by the main engine load profile. In general, the effectiveness of the measures is not without limits, particularly concerning older ships and those that have already installed several options. Solutions such as market-based measures and alternative fuels, classed by IMO as medium- and long-term measures, must be considered soon.
The purpose of this paper is to provide an overview and discussion of potential Market Based Measures (MBMs) under the Initial IMO Strategy for the reduction of greenhouse gas (GHG) emissions from ships. In this context, some related developments are also seen as directly relevant, mainly in the context of the possible inclusion of shipping into the EU Emissions Trading System (ETS). A comparative evaluation of maritime MBMs is made using the following criteria: GHG reduction effectiveness, compatibility with existing legal framework, potential implementation timeline, potential impacts on States, administrative burden, practical feasibility, avoidance of split incentives between ship-owner and charterer, and commercial impacts. The paper breaks down potential MBMs into the following classes: Bunker levy/carbon levy MBMs, ETS (global and/or EU ETS) MBMs and other MBM proposals.
One of the proposed approaches to decarbonize freight transport systems is to internalize the environmental costs of transport, by means of carbon emission-based taxes. The expected impact is a reduction of transport demand and an increased use of environmentally friendly transport technologies. The magnitude of the impact will depend on the levels of taxation, the activities to which they apply and the degrees of freedom allowed to companies to react to the taxes. In this chapter we explore the impact mechanisms of carbon taxes by investigating the reorganization responses of freight decision-makers. We do this through a series of empirical cases of recent modelling studies at city, corridor, country, continent and global level. The city case involves an application of an agent-based model to evaluate a carbon credit point system for city logistics. The corridor case involves carbon pricing of container transport in the hinterland of the port of Rotterdam over a multimodal network. The country and continental cases describe the effects of network-wide truck charging, with a focus on mode choice, vehicle type and routing. The global case concerns a full economic impact analysis of internalization of external costs of supply chains, also looking at the effect of changes in sourcing decisions of companies. We draw lessons concerning the impacts of logistics decisions on the impact of policies and identify needs for further research. Common findings relevant for climate change policy include the following: (1) prices needed to achieve a significant impact are a multiple of current market prices, (2) logistics decisions may act as buffer for the propagation of taxes towards consumers and, as a result, (3) the ultimate price impacts for consumers could remain small. In order to be able to predict impacts of climate policies, there is a need to continue research on the way companies take logistics decisions. This includes decisions in specific areas or logistics, but also on decision processes, to better understand the dynamics of impact pathways.
International shipping has finally set a target to reduce its CO2 emission by at least 50% by 2050. Despite this positive progress, this target is still not sufficient to reach Paris Agreement goals since CO2 emissions from international shipping could reach 17% of global emissions by 2050 if no measures are taken. A key factor that hampers the achievement of Paris goals is the knowledge gap in terms of what level of decarbonization it is possible to achieve using all the available technologies. This paper examines the technical possibility of achieving the 1.5° goal of the Paris Agreement and the required supporting policy measures. We project the transport demand for 6 ship types (dry bulk, container, oil tanker, gas, wet product and chemical, and general cargo) based on the Organization for Economic Co-operation and Development’s (OECD’s) global trade projection of 25 commodities. Subsequently, we test the impact of mitigation measures on CO2 emissions until 2035 using an international freight transport and emission model. We present four possible decarbonization pathways which combine all the technologies available today. We found that an 82–95% reduction in CO2 emissions could be possible by 2035. Finally, we examine the barriers and the relevant policy measures to advance the decarbonization of international maritime transport.
As a consequence of globalization, increased international transport generates many pollutants. Pollution generation from other industries related to international transport also cannot be ignored. This paper thus aims to investigate the carbon emissions from international transport. We analyzed embodied carbon emissions of international transport using multi-region input output analysis, and identified the factors underlying changes in emissions using structural decomposition analysis. China was the world’s largest CO2-emitting country in international transport in terms of both production- and consumption-based standards. However, consumption-based emissions in that country were much lower than production-based emissions, while in the United States, with second largest emissions, the situation was the opposite. Major emission changes were contingent on demands for international transportation and emission efficiency. In the case of the European Union (EU), consumption-based emissions were higher, but CO2 emissions decreased gradually due to increased emission efficiency. The different information is provided by each standard, and reduction targets can change according to the standards employed. While discussions on emissions standards are still in progress, the results of this study suggest that CO2 emissions from international transport, and according to different emissions standards, should receive careful attention in energy policy design, in order to limit CO2 emissions globally.
This paper presents a new detailed global quantitative assessment of the economic consequences of climate change (i.e. climate damages) to 2060. The analysis is based on an assessment of a wide range of impacts: changes in crop yields, loss of land and capital due to sea level rise, changes in fisheries catches, capital damages from hurricanes, labour productivity changes and changes in health care expenditures from diseases and heat stress, changes in tourism flows, and changes in energy demand for cooling and heating. A multi-region, multi-sector dynamic computable general equilibrium model is used to link different impacts until 2060 directly to specific drivers of economic growth, including labour productivity, capital stocks and land supply, as well as assess the indirect effects these impacts have on the rest of the economy, and on the economies of other countries. It uses a novel production function approach to identify which aspects of economic activity are directly affected by climate change. The model results show that damages are projected to rise twice as fast as global economic activity; global annual Gross Domestic Product losses are projected to be 1.0–3.3% by 2060. Of the impacts that are modelled, impacts on labour productivity and agriculture are projected to have the largest negative economic consequences. Damages from sea level rise grow most rapidly after the middle of the century. Damages to energy and tourism are very small from a global perspective, as benefits in some regions balance damages in others. Climate-induced damages from hurricanes may have significant effects on local communities, but the macroeconomic consequences are projected to be very small. Net economic consequences are projected to be especially large in Africa and Asia, where the regional economies are vulnerable to a range of different climate impacts. For some countries in higher latitudes, economic benefits can arise from gains in tourism, energy and health. The global assessment also shows that countries that are relatively less affected by climate change may reap trade gains.
Twenty-five years ago, the Union of Concerned Scientists and more than 1700 independent scientists, including the majority of living Nobel laureates in the sciences, penned the 1992 “World Scientists’ Warning to Humanity” (see supplemental file S1). These concerned professionals called on humankind to curtail environmental destruction and cautioned that “a great change in our stewardship of the Earth and the life on it is required, if vast human misery is to be avoided.” In their manifesto, they showed that humans were on a collision course with the natural world. They expressed concern about current, impending, or potential damage on planet Earth involving ozone depletion, freshwater availability, marine life depletion, ocean dead zones, forest loss, biodiversity destruction, climate change, and continued human population growth. They proclaimed that fundamental changes were urgently needed to avoid the consequences our present course would bring.
The authors of the 1992 declaration feared that humanity was pushing Earth's ecosystems beyond their capacities to support the web of life. They described how we are fast approaching many of the limits of what the biosphere can tolerate without substantial and irreversible harm. The scientists pleaded that we stabilize the human population, describing how our large numbers—swelled by another 2 billion people since 1992, a 35 percent increase—exert stresses on Earth that can overwhelm other efforts to realize a sustainable future (Crist et al. 2017). They implored that we cut greenhouse gas (GHG) emissions and phase out fossil fuels, reduce deforestation, and reverse the trend of collapsing biodiversity.
The paper presents a new model for trade flows in Europe that is integrated with a logistics model for transport chain choice through Logsum variables. Logsums measures accessibility across an entire multi-modal logistical chain, and are calculated from a logistics model that has been estimated on disaggregated micro data and then used as an input variable in the trade model. Using Logsums in a trade model is new in applied large-scale freight models, where previous models have simply relied on the distance (e.g. crow-fly) between zones. This linkage of accessibility to the trade model makes it possible to evaluate how changes in policies on transport costs and changes in multi-modal networks will influence trade patterns. As an example the paper presents outcomes for a European-wide truck tolling scenario, which showcases to which extent trade is influenced by such a policy. The paper discusses how such a complex model can be estimated and considers the choice of mathematical formulation and the link between the trade model and logistics model. In the outcomes for the tolling scenario we decompose the total effects into effects from the trade model and effects from the logistics model.
Conventional cost-benefit analyses of infrastructure projects are often partial analyses in which only the transport market is assessed while adjacent markets are neglected. For large infrastructure investments, however, this is more often than not an unrealistic assumption, especially in the case of investments affecting urban areas where markets adjacent to the transport markets are believed to exhibit a large number of externalities. This paper suggests an alternative approach to tackling the problem; namely, modeling the entire Norwegian economy in a general equilibrium setting. We have developed a Spatial Computable General Equilibrium (SCGE) model for Norway that takes into account urban dynamics through New Economic Geography features. This means modeling centripetal and centrifugal economic forces that produce changes in urban clusters. We use it to calculate direct benefits and the wider economic impacts of infrastructure investments for freight transport in selected case studies. For one particular case study, we find wider economic impacts of 17.0% of the direct benefits for passenger transport and 3.7% for freight transport. This suggests, first, that appraisal of infrastructure projects is to underestimate the real benefits and, second, decisions based on conventional wider economic impact analyses that only take into account passenger transport will tend to overemphasize passenger transport relative to freight transport. We argue that goods and labor demand effects, i.e. effects in markets adjacent to the transport market, are important if we are fully to realize the effects of infrastructure investments.
An introduction to random-utility-based multiregional input–output models used for the purpose of spatial economic and transport interaction modelling is provided. The main methodological developments and important results of a dozen applications from the years 1996–2013 are described. This is followed by an outlook of potential future directions. Further research is mainly needed in five areas: (a) overall validation of the method, perhaps through back-casting applications on infrastructure plans with observed trade impacts; (b) extensions of trade coefficient models to add realism and improve accuracy; (c) the use of multi-scale modelling to capture interdependencies between geographical scales and to improve the representation of exports and imports; (d) improvements in the representation of price effects, as well as innovation and technological progress, by way of variable technical coefficients; and (e) a deeper investigation of the algorithm used to include elastic selling prices.
Greater attention has been given to trade costs in both the empirical trade literature and in theoretical models of international
trade in recent years, with interest increasingly being directed towards the role of nonpolicy barriers such as transport
costs. However, if distance is a proxy for transport and other trade costs, then the true effect of transport costs is impossible
to determine. We attempt to remedy this by utilizing the newly compiled Organisation for Economic Co-operation and Development
Maritime Transport Cost database to investigate the role that maritime freight costs play in determining ocean-shipped agricultural
imports. We find that transport costs robustly and significantly negatively impact agricultural imports, even after controlling
for shipping distance.
Recent literature has emphasized the importance of transport costs and infrastructure in explaining trade, access to markets, and increases in per capita income. For most Latin American countries, transport costs are a greater barrier to U.S. markets than import tariffs. We investigate the determinants of shipping costs to the U.S. with a large database of more than 300,000 observations per year on shipments of products aggregated at six-digit HS level from different ports around the world. Distance volumes and product characteristics matter. In addition, we find that ports efficiency is an important determinant of shipping costs. Improving port efficiency from the 25th to the 75th percentile reduces shipping costs by 12 percent. (Bad ports are equivalent to being 60% farther away from markets for the average country.) Inefficient ports also increase handling costs, which are one of the components of shipping costs. Reductions in country inefficiencies associated to transport costs from the 25th to 75th percentiles imply an increase in bilateral trade of around 25 percent. Finally, we try to explain variations in port efficiency and find that they are linked to excessive regulation, the prevalence of organized crime, and the general condition of the country's infrastructure.
Transportation is one of the significant sources of global anthropogenic emissions, generating about 14% of global
Greenhouse Gas Emissions (GHG) with the largest contribution from ground transportation followed by air and water transport. However, international climate agreements such as the Kyoto Protocol or Paris Agreement focused mostly on the regulation of production emissions without considering transport emissions in policy regulations. In this paper I analyze the effects of global carbon pricing on international trade and modal choice in the transportation of goods between countries, and resulting changes in international transport emissions. For this purpose I modify the Energy-environmental version of the Global Trade Analysis Project (GTAP-E) model to allow for substitution among different modes of transport.
I find that a global GHG tax increases the competitiveness of transport services exports from the most developed countries which exhibit relatively low economic emissions intensities, while having a negative effect of services exports from most developing regions, which have relatively higher emissions rates per dollar of transport services. The findings also indicate that when international transport emissions and modal substitution are considered in global emissions regulation policies there is significant impact on the expected reduction in global
emissions and global warming.
In the transport planning process, decision makers require reliable and informative appraisals to facilitate comparisons and determine if a proposal is worthwhile to society. The cost–benefit analysis is the most common form of appraisal, where benefits are primarily measured from the change in consumer surplus in the transport market. However, these benefits will only reflect maximum social welfare if markets operate perfectly competitively and without any market failures. There may be significant uncaptured impacts, known as wider economic impacts, which agencies are beginning to incorporate in appraisals using ad-hoc methods. Computable general equilibrium (CGE) models are an increasingly popular method for assessing the economic impact of transport, including both direct and wider economic impacts, as they can determine the distribution of impacts among every market and agent in the economy by simulating the behaviour of households, firms and others from microeconomic first principles. Aside from their traditional role estimating changes in macroeconomic variables, CGE models can provide a measure of welfare that guarantees no double counting and accounts for nth order effects. This paper reviews the full range of CGE models that have been applied to transport issues and discusses their role in transport appraisal. CGE models for transport have been developed in urban, regional and environmental economics as well as other fields, and each field has applied its own theory, assumptions and practices to represent the relationships between transport and the economy relevant to the field. This paper also discusses the general role of CGE modelling in transport appraisal, as well as theoretical and practical concerns regarding CGE modelling practice.
Canada has recently made progress with several free trade agreements (FTAs), and although the government has carried out considerable analysis of their potential impact on the Canadian economy, little to no work has been done to assess the potential impact on Canada's transportation system. The objective of the research was to estimate the impacts of recent and forthcoming FTAs on Canada's domestic trade infrastructure. This study extended a typical computable general equilibrium simulation of an FTA by estimating high-level domestic supply chain characteristics (i.e., subnational region of origin or destination, subnational region of exit or entry, international transportation mode, port of clearance) and by converting the resulting trade flows to freight flows measured in tonnage. The results indicate that the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) may have had large impacts on Canada's Continental and Atlantic Gateways, especially at the Port of Montreal, Quebec, as a result of trade creation with the EU. CETA also has had impacts on various crossings at the U.S. border as a result of trade diversion with the United States. Simulations, however, suggested that the Canada-Korea Free Trade Agreement has had relatively small impacts, mostly concentrated in the Asia-Pacific Gateway, particularly at the Port of Vancouver, British Columbia. Although the impacts were FTA-specific, this research demonstrated the need to consider FTAs in commodity forecasting and freight transportation planning, because they could make sizable changes to future freight flows on domestic transportation infrastructure.
International freight transportation has grown rapidly in the past decade. Economic, technical, and market changes (such as increased Internet usage, rapid advances in information and communication technologies, and the globalization of supply chains) have been observed around the world. These changes are likely to affect the demand for freight transportation as well as the type of products shipped. International trade is conventionally expressed in terms of monetary value, but this measure cannot represent the physical nature of transportation. There is a need to relate the monetary nature of international trade to the physical nature of international freight transportation. This study considers the value weight trends for commodity trade between the United States and her trading partners and compares the value tonnage trends for commodities carried by different transport modes. Statistical models are developed for key commodity groups to determine value tonnage ratio trends in different international trade routes. Value tonnage ratios are important in identifying trends in freight generation and commodity flow. Implications of the obtained modeling results are also discussed.
International shipping is a vital channel linking the world economy, particularly from the perspective of international commodity trade. The recently proposed carbon regulation in international shipping will not only affect the competitiveness of shipping lines, but will also have implications for the global economy. This paper adopts an energy–environmental version of the Global Trade Analysis Project referred to as GTAP-E to analyze the quantitative effects of a maritime carbon tax on the global economy by placing a special focus on containerizable commodities given their significant role in international trade. The major advantage of the GTAP-E model is that it can capture the effects of asymmetric changes in freight costs on different routes caused by the maritime carbon tax. Based on our numerical results, imposing a maritime carbon tax on international container shipping will not lead to a significant economic impact unless the tax level is high. China will suffer the greatest real GDP loss among all countries. Under a high level of global maritime carbon tax ($90/tCO2), the real GDP loss to China will be around 0.02%. The negative economic impacts on the European countries will be greater if a maritime carbon tax is imposed only on the European container exporting/importing routes, compared to the situation where a global maritime carbon tax is imposed on container shipping. Finally, the imposition of a maritime carbon tax will discourage distant container trade on the routes (origin–destination) “China–USA”, “Rest of Asia–USA”, and “South America–China”.
The development of inland freight distribution systems has been an active strategy to promote the hinterland of maritime gateways around the world. While differences can be observed among North-American and European hinterlands, the setting and development of rail-based dry ports in those regions come in many forms and shapes. This paper demonstrates that the observed similarities and differences are the result of the regional and local governance and regulatory settings, the types and strategies of stakeholders involved, the spatial and functional relations with adjacent and or distant gateway ports, the dynamics in logistics network configurations, the specific competitive setting (i.e. competition with trucking and barges in Europe) and the imperatives in rail operations. In spite of the technical similarities brought by intermodalism, European and North American dry ports are functionally two of a kind since they play different roles within their respective transport and supply chains.
We collect extensive data on worldwide trade by transportation mode and use this to provide detailed comparisons of the greenhouse gas emissions associated with output versus international transportation of traded goods. International transport is responsible for 33 percent of world-wide trade-related emissions, and over 75 percent of emissions for major manufacturing categories like machinery, electronics and transport equipment. US exports intensively make use of air cargo; as a result two-thirds of its export-related emissions are due to international transport, and US exports by themselves generate a third of transport emissions worldwide. Inclusion of transport dramatically changes the ranking of countries by emission intensity. US production emissions per dollar of exports are 16 percent below the world average, but once we include transport US emissions per dollar exported are 59 percent above the world average. We use our data to systematically investigate whether trade inclusive of transport can lower emissions. In one-quarter of cases, the difference in output emissions is more than enough to compensate for the emissions cost of transport. Finally, we examine how likely patterns of trade growth will affect modal use and emissions. Full liberalization of tariffs and GDP growth concentrated in China and India lead to transport emissions growing much faster than the value of trade, due to trade shifting toward distant trading partners. Emissions growth from growing GDP dwarfs any growth from tariff liberalization.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
In this study we develop an integrated econometric and CGE modelling framework for transport projects and transport policies at the European level by integrating network, regional economic and macro-economic impacts. The paper presents the formal structure of the integrated econometric and CGE modelling framework, explains the calibration and applies it to the policy evaluation. The effects of infrastructure investments are modelled by simulating trade cost changes in a comparative static analysis, using estimates of trade cost changes due to new infrastructure links, obtained from a transport network model. By performing a systematic and quantitative analysis of the spatial, network and socio-economic impacts of transport investments and policy and carrying out scenario simulations we improve the under-standing of the impact of transportation policies on short- and long-term spatial development in the EU.
Research to assess impacts on developing countries of measures to address emissions in the international aviation and shipping sectors
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