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Carbon pricing in the shipping sector

Study analyses carbon pricing options for maritime emissions

(Photo by Vidar Nordli-Mathisen on unsplash)
(Photo by Vidar Nordli-Mathisen on unsplash)

April 2019 - A carbon price can play an important role in steering the international maritime sector towards decarbonisation – a task that is both feasible and necessary in order to stay within the 1.5 °C global average temperature increase threshold. When considering how to implement a carbon price on shipping, a number of important questions need to be considered including the design of an MRV system, what should be the compliance entity, and how to enforce the measure. In this study which has been financed by the German Environment Ministry, NewClimate Institute explores three different options for a market-based measure for international shipping: an offsetting scheme, an emissions trading scheme, and a climate levy. The study finds that a climate levy would be the most appropriate measure to help decarbonise the sector in keeping with the goals outlined in the Paris Agreement. Based on this analysis, the study outlines possible next steps for policy makers and stakeholders.