Carbon trading in shipping : an exploratory analysis of economic costs and benefits

Abstract

Today's Earth contains many ecological problems, such as the greenhouse effect caused by global warming. Today's environmental governance work has attracted a high degree of global attention. Both developed and developing countries have not neglected the process of economic development. With the continuous increase in international trade with recent years, the emission of greenhouse gases by shipping has also increased in proportion from the number of ships. Although the global climate governance system needs to be further improved, but improving the international shipping carbon trading mechanism has become the consensus of climate governance. Most of China's bulk commodities are transported by sea. Since maritime transport plays an important position in the international trade, any policy measures that have an impact on shipping costs may cause changes in the international trade pattern. Here, starting with theoretical research and supplemented by empirical analysis, we have studied and discussed relevant works at home and abroad and the theory of environmental finance and economics concerning carbon trading, and have synthesized various carbon trading mechanisms. The model is constructed according to the partial equilibrium theory, and the sensitivity analysis is used to study the reasons that affect the cost of carbon trading. These experiments show that after the introduction of the carbon trading policy, the trade reduction is less than the carbon emission reduction. This shows that the carbon trading market increases the cost of the ship on the one hand, but its carbon emission is much more restrained than its trade. At the same time, the study also found that under the same carbon emission price level, the lower the fuel price, the higher the proportion of trade reduction and carbon emission reduction. Finally, measures are proposed from the aspects of economy, technology, policy and education to solve the problem of China's greenhouse effect.