The Legal Application of Carbon Emission Trading System in International Shipping Industry

Abstract

The international shipping industry is critical to achieving the climate goals of the Paris Agreement. Carbon emission trading system, as an important market mechanism to promote global greenhouse gas emission reduction, is extending from the level of national governance to the field of international shipping. There are many challenges in the legal application of the carbon trading scheme to the international shipping industry. The unilateral expansion of the EU-ETS has led to disputes over extraterritorial jurisdiction. The mobility characteristics of the shipping industry make it difficult to calculate total carbon emissions and identify responsible parties. The flag of convenience system separates flag states from beneficial owners, weakening the basis for the application of the principle of common but differentiated responsibilities. The international carbon market is difficult to coordinate and faces multiple challenges such as technology, system and state participation. Therefore, it is necessary to adhere to the leading position of IMO when building the carbon trading market of the international shipping industry, establish the "actual controller" traceability mechanism, and advocate mutual recognition of technical standards and regional cooperation.

Keywords: Emission trading system, Shipping industry, The Paris Agreement, EU-ETS, Carbon emissions