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Feasibility Study and Impact Assessment


In line with the new work plan, MEPC 60 called for an Expert Group (EG) to undertake a feasibility study and impact assessment on the proposed Market-Based Measures (MBMs).  The EG was made up of experts nominated by Member Governments and organizations, but served in their own personal capacity.  Consistent with the terms of reference given by the Committee, the EG evaluated the various proposals with the aim to assess the extent to which each proposed measure could assist in reducing GHG emissions from international shipping.  The EG was requested to consider the following criteria in its analysis:
  1. environmental effectiveness;
  2. cost-effectiveness;
  3. potential to provide incentives to technological change and innovation and to accommodate existing emission reduction and energy efficiency technologies;
  4. practical feasibility of implementation;
  5. need for technology transfer to, and capacity building within, developing countries, in particular the least developed countries (LDCs) and the small island development states (SIDS);
  6. relation with other relevant conventions and compatibility with customary international law, as depicted in the United Nations Convention on the Law of the Sea (UNCLOS);
  7. potential additional administrative burden for the national administration;
  8. potential additional workload, economic burden, and operational impact for individual ships, the shipping industry and the maritime sector as a whole; and
  9. compatibility with the existing provisions under the IMO legal framework.
To manage the work load in a tight time scale, the EG established four task-groups: Environment, Shipping and Maritime, Administrative and Legal, and Trade and Development and Developing Countries.

Outcome of the Feasibility Study and Impact Assessment

EG noted that the evaluation of the MBMs had been complicated by the different levels of maturity of the proposals and that all proposals required further elaboration and development to enable a full assessment of all possible impacts in a comparable analysis.  The EG concluded that all proposals addressed reduction of GHG emissions from shipping, although the proposed means of doing so differed with some proposals focusing on in-sector reductions and others also utilising reductions in other sectors.  Some of the proposals went beyond mitigation and proposed a mechanism that provided for substantial contribution to address the adverse effects of climate change.  Moreover, the EG found that all proposals could be implemented notwithstanding the challenges associated with the introduction of new measures and possible negative impacts such as increases in bunker fuel prices and freight costs.  Some countries would be affected more than others by these impacts.  Some proposals tried to mitigate such negative impacts.
The EG Report was presented at MEPC 61 (September/October 2010).  The Committee was to a great extend assisted by the comprehensive EG report and held an extensive debate on how to progress the development of suitable MBMs and recalled that the MEPC 59 work plan intended the outcome and conclusions of the EG to enable the Committee to indicate, preferably at
MEPC 61, which MBM should be further evaluated.  However, despite the
EG Report no majority view prevailed.  The Committee, therefore, agreed to hold an Intersessional Meeting of the Working Group on GHG Emissions from Ships in March 2011 tasking it with providing an opinion on the compelling need and purpose of MBMs as a possible mechanism to reduce GHG emissions from international shipping.  The meeting was also tasked to evaluate further the proposed MBMs considered by the EG, including their impact on, among others, international trade, the maritime sector of developing countries, as well as the corresponding environmental benefits.  The report from the Intersessional Meeting was to be submitted to MEPC 62 in July 2011 enabling the MEPC to make further progress in accordance with its work plan.