Reducing greenhouse gas emissions from international shipping: Is it time to consider market-based measures?

International shipping carries around 80 per cent of global trade by volume and over 70 per cent by value. However, there is concern that the greenhouse gas (GHG) emissions from international shipping lead to adverse effects on climate, human health and marine ecosystems. Currently the international climate change regime under the United Nations Framework Convention on Climate Change (UNFCCC) process and the IMO through its Marine Environment Protection Committee are grappling with this issue, and GHG emissions from international shipping have been partially regulated by amendments to Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78) in 2011 and 2014. These amendments aim to reduce GHG emissions from international shipping by means of technical and operational measures. However, research indicates that the adopted technical and operational measures alone would not achieve absolute emissions reduction due to projected growth of international seaborne trade. Currently it is still controversial whether it is time to consider market-based measures (MBMs) in furthering the reduction of shipping GHG emissions. This article examines whether it is necessary to adopt MBMs, proposes a preferred MBM, and suggests that a MBM be considered in or after 2016.