Ship-owner response to carbon taxes: Industry and environmental implications

Pierre Cariou, Ronald A. Halim and Bradley J. Rickard

Ecological Economics, 2023, vol. 212, issue C

Abstract: We consider the effects of a maritime bunker levy on ship-owner profits, trade, and emissions. Standard and augmented gravity models are employed using data from 2016 to estimate the impact of a change in transit time and transit cost on grain and soybean trade flows and on vessel speed. Results for a bunker levy of 50 USD per tonne of fuel, or less, stress that it will not trigger a change in the optimal speed of the vessel which is contrary to most theoretical models that predict an increase in fuel costs will always lead to a reduction in speed and carbon emissions. Bunker levies exceeding 100 USD per tonne may be needed to reduce carbon emissions when trade flows are sensitive to trade costs and transport time, as may be the case for many agricultural commodities.

Keywords: Agricultural trade; Bunker levy; Carbon tax; Environmental policy; Maritime economics; Gravity model (search for similar items in EconPapers)
JEL-codes: D22 F18 H23 Q17 R41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921800923001805
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:212:y:2023:i:c:s0921800923001805

DOI: 10.1016/j.ecolecon.2023.107917

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().