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Re-analyzing the economic impact of a global bunker emissions charge

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  • Sheng, Yu
  • Shi, Xunpeng
  • Su, Bin
Abstract
Regulating bunker emissions continues to be a challenging task, largely due to the lack of a globally coordinated scheme providing economic and political incentives to potential participating countries. This paper analyses the economic costs and benefits of imposing a global carbon tax on international bunker emissions by employing a computable general equilibrium model approach. Under the assumption of an emissions reduction of 5% below 2000 levels by 2020, we demonstrate that a global bunker emissions charge, on one hand, reduces trade volume and change trade patterns between countries and regions, while on the other hand, accelerates the adoption of energy-saving technologies and reallocates the supply of international transportation services throughout the world. The net economic impact, though negative on average, is modest compared to the benefits obtained from the emissions reduction. If revenues from a bunker emissions charge are properly distributed among countries and regions, the losses to disadvantaged countries are likely to be offset by the benefits to advantaged countries. This finding provides useful insights for policy-makers: a global bunker emissions charge could, in future, be an economically feasible strategy to reduce the increasing bunker emissions through the implementation requires more political effort and wisdom.

Suggested Citation

  • Sheng, Yu & Shi, Xunpeng & Su, Bin, 2018. "Re-analyzing the economic impact of a global bunker emissions charge," Energy Economics, Elsevier, vol. 74(C), pages 107-119.
    • Handle: RePEc:eee:eneeco:v:74:y:2018:i:c:p:107-119
    DOI: 10.1016/j.eneco.2018.05.035
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    Cited by:

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    2. Yang, Shuai & Yuan, Jun & Nian, Victor & Li, Lu & Li, Hailong, 2022. "Economics of marinised offshore charging stations for electrifying the maritime sector," Applied Energy, Elsevier, vol. 322(C).
    3. Felbermayr, Gabriel & Peterson, Sonja & Wanner, Joschka, 2022. "The impact of trade and trade policy on the environment and the climate: A review," Kiel Working Papers 2233, Kiel Institute for the World Economy (IfW Kiel).
    4. Goh, Tian & Zhong, Sheng & Ang, B.W. & Su, Bin & Ng, Szu Hui & Chai, Kah-Hin, 2021. "Driving factors of changes in international maritime energy consumption: Microdata evidence 2014–2017," Energy Policy, Elsevier, vol. 154(C).
    5. Mundaca, Gabriela & Strand, Jon & Young, Ian R., 2021. "Carbon pricing of international transport fuels: Impacts on carbon emissions and trade activity," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    6. Paula C. Pereda & Andrea Lucchesi, 2022. "Alternative frameworks for cost-effectiveness analysis of environmental policies in maritime transport," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 630-650, September.

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    More about this item

    Keywords

    Bunker emissions charge; International maritime transport; Economic and trade impact; CGE model;
    All these keywords.

    JEL classification:

    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment

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