Cost-effectiveness assessment of CO 2 reducing measures in shipping

Magnus S. Eide, Øyvind Endresen, Rolf Skjong, Tore Longva and Sverre Alvik

Maritime Policy & Management, 2009, vol. 36, issue 4, 367-384

Abstract: International shipping is a significant contributor to global greenhouse gas (GHG) emissions, and is under mounting pressure to contribute to overall GHG emission reductions. There is an ongoing debate regarding how much the sector could be expected to reduce emissions and how the reduction could be achieved. This paper details a methodology for assessing the cost-effectiveness of technical and operational measures for reducing CO 2 emissions from shipping, through the development of an evaluation parameter called the Cost of Averting a Tonne of CO 2 -eq Heating, CATCH, and decision criterion, against which the evaluation parameter should be evaluated. The methodology is in line with the Intergovernmental Panel on Climate Change (IPCC) and with regulatory work on safety and environmental protection issues at the International Maritime Organization (IMO). The results of this study suggest that CATCH >50 $/tonne of CO 2 -eq should be used as a decision criterion for investment in emission reduction measures for shipping. In total, 13 specific measures for reducing CO 2 emissions have been analysed for two selected case ships to illustrate the methodology. Results from this work shows that several measures are cost effective according to the proposed criterion. The results suggest that cost effective reductions for the fleet may well be in the order of 30% for technical measures, and above 50% when including speed reductions. The results of this study show that the cost effectiveness approach for the regulation of shipping emissions is viable and should be pursued in the ongoing regulatory process.

Date: 2009
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DOI: 10.1080/03088830903057031

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