Environmental Engineering Reference
In-Depth Information
Fund (ICF), the Energy Efficiency Design Index
(EEDI), the Energy Efficiency Operational Index
(EEOI), and the Ship Energy Efficiency Manage-
ment Plan (SEEMP) (Buhaug, et al ., 2009).
METS is designed to ensure that the market
determines the emission price. Ships can either
choose to reduce CO 2 directly or purchase the
right to emit. The system enables ships with higher
marginal abatement cost to buy the allowances
at a lower price from the market. Two METS are
under discussion, one is the METS only for ships
(Closed METS), and the other is to incorporate
the METS with other industries (Open METS)
(Buhaug, et al ., 2009; IMO 2009a).
The proposed ICF authorizes state members to
license the bunker suppliers within their territories,
and these suppliers must be registered with the
Compensation Fund Administrator (CFA). Flag
Ships must purchase fuel only from a licensed
bunker supplier and flag states could monitor
such purchase. The money collected would be
used by the CFA to operate the fund to reduce
GHGs (IMO 2009b).
EEDI can be applied to both new and old
ships. The baseline EEDI is first decided for each
type of ship. Based on the proposed formula, the
EEDI for each ship is then calculated. The later
EEDI has to be smaller than the baseline EEDI,
otherwise ships are subject to a unattainable fee.
EEDI is easier to facilitate and enforce given the
simplified formula.
EEOI, which was previously referred as the
IMO CO 2 index, is created to express the ratio
between the emissions and the benefits derived
from the ship transportation. It shows actual CO 2
efficiency in terms of emissions of CO 2 per unit
of transported work. This can be a function of
operating practice and vessel design.
SEEMP is an energy efficiency improvement
scheme developed by the IMO for ship owners
and ship operators to be used at their discretion.
SEEMP includes the promotion of best practices
and other operational matters, improved cargo
speed, trim, ballast, and hull design, along with
improved voyage planning, weather routing, and
just-in-time service.
The latest trend in the MEPC is to consider
combining some of these policy instruments. These
hybrid systems make use of the advantages of
each policy options. For instance, US propose to
combine the EEDI with the credit trading system
(IMO, 2010a). The World Shipping Council pro-
poses to combine the EEDI with the ICF (IMO,
2010b). These proposals will be discussed in the
latest MEPC meeting (MEPC60) in March 2010.
The IMO also suggests that the selection of
those policy options should consider environ-
mental impacts, economic costs, administrative
burdens, and the feasibility of implementation
(Buhaug et al ., 2009). These four standards en-
able GHG reduction policies to be cost-effective
and applicable.
MARITIME TRANSPORTATION
AND INTERNATIONAL TRADE
Maritime transportation has been credited as one
of reasons for the rapid growth in the post-war
international trade (Baier & Bergstrand, 2001).
Substantial cost reductions in marine shipping due
to the containerization, economy of scale, and other
technological breakthroughs have been one of the
most important stimuli in propelling post-war
international trade growth (Harley, 1988; Rose,
1991; Krugman, 1996). Countries with seaports
are at an advantage in terms of economic growth
and social development (Radelet & Sachs, 1999;
Redding & Venables, 2004). In recent decades, to
accommodate costumer demand and to reduce total
cost, shipping companies have deployed larger and
faster ships in order to achieving better service at
a lower cost. This trend and the economic reasons
behind it have been well documented in the lit-
erature (Cullinane et al ., 1999; Lloyds Maritime
Information System, 2007).
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