How Will the Marine Emissions Trading Scheme Influence the Profit and CO2 Emissions of a Containership - Computational Logistics - page 45

How Will the Marine Emissions Trading Scheme
Influence the Profit and CO 2 Emissions
of a Containership

Zehui Huang 1 , Xiaoning Shi 2 , Jingfei Wu 3 , Hao Hu 1 , and Jinsong Zhao 4

1 Shanghai Jiao Tong University, Shanghai, China
{sjtuhzh0205,hhu}@sjtu.edu.cn
2 Shanghai Jiao Tong University, Shanghai, China & University of Hamburg, Germany
[e-mail], [e-mail]
3 Shanghai University, Shanghai, China
[e-mail]
4 East China University of Political Science and Law, Shanghai, China
[e-mail]

Abstract. Greenhouse Gas (GHG) emissions from international shipping has
become an increasing concern to the whole world. Although the shipping indus-
try 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 CO 2 and
studies its influence on the annual profit and CO 2 emissions of containerships
based on speed reduction. Through a case study, we demonstrate that speed re-
duction 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.

Keywords: Marine Emissions Trading Scheme, Auction Rate, Speed Reduc-
tion, Profitability.

1 Introduction

Global climate change has already had observable effects on the environment. Early
researchers generally suggested that the atmosphere had been warmed over the past
century, and human activities were likely to be the most important driving factor to
that change. Global emissions of CO 2 from international shipping are substantial and
have a long history dating back to the industrial revolution [1]. It is estimated that in
2007 international shipping have emitted 870 million tons, or about 2.7% of the glob-
al emissions of CO 2 [2]. Currently, emissions from shipping are around 1000 million
tons annually, nearly 130 million tons more comparing with 2007, and in the absence
of action they are expected to be more than double by 2050 [3].