Evaluation of the Market-Based Measures by the IMO Criteria: Effects of Current Dynamics

Abstract

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. © 2023 Elsevier B.V., All rights reserved.