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Speed optimization versus speed reduction: Are speed limits better than a bunker levy?

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  • Harilaos N. Psaraftis

    (Technical University of Denmark)

Abstract

The purpose of this paper is to shed some light on the speed limit debate, and specifically to look into whether reducing speed by imposing a speed limit is better than achieving the same by imposing a bunker levy. This debate, along with the various issues of speed optimization versus speed reduction, is currently ongoing at the International Maritime Organization (IMO), in the quest to reduce greenhouse gas (GHG) emissions from ships. In that context, “speed optimization” and “speed reduction” have been included in the set of candidate short-term measures under discussion at the IMO. However, there is much confusion on what either speed optimization or speed reduction may mean, and some stakeholders have proposed mandatory speed limits as a measure to achieve GHG emissions reductions. To investigate this issue, the speed limit option is compared with the option of reducing speed via a bunker levy. The latter option is not under immediate discussion at the IMO, to be potentially included in the set of medium-term measures. The main result of the paper is that the speed limit option exhibits a number of deficiencies as an instrument aiming to reduce GHG emissions, at least vis-à-vis the bunker levy option.

Suggested Citation

  • Harilaos N. Psaraftis, 2019. "Speed optimization versus speed reduction: Are speed limits better than a bunker levy?," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(4), pages 524-542, December.
    • Handle: RePEc:pal:marecl:v:21:y:2019:i:4:d:10.1057_s41278-019-00132-8
    DOI: 10.1057/s41278-019-00132-8
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    References listed on IDEAS

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    1. Thalis Zis & Robin Jacob North & Panagiotis Angeloudis & Washington Yotto Ochieng & Michael Geoffrey Harrison Bell, 2014. "Evaluation of cold ironing and speed reduction policies to reduce ship emissions near and at ports," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 16(4), pages 371-398, December.
    2. Harilaos N. Psaraftis, 2016. "Green Maritime Transportation: Market Based Measures," International Series in Operations Research & Management Science, in: Harilaos N. Psaraftis (ed.), Green Transportation Logistics, edition 127, chapter 0, pages 267-297, Springer.
    3. Harilaos N. Psaraftis & Christos A. Kontovas, 2015. "Slow Steaming in Maritime Transportation: Fundamentals, Trade-offs, and Decision Models," International Series in Operations Research & Management Science, in: Chung-Yee Lee & Qiang Meng (ed.), Handbook of Ocean Container Transport Logistics, edition 127, chapter 11, pages 315-358, Springer.
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    5. Magirou, Evangelos F. & Psaraftis, Harilaos N. & Bouritas, Theodore, 2015. "The economic speed of an oceangoing vessel in a dynamic setting," Transportation Research Part B: Methodological, Elsevier, vol. 76(C), pages 48-67.
    6. Ali Cheaitou & Pierre Cariou, 2012. "Liner shipping service optimisation with reefer containers capacity: an application to northern Europe--South America trade," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(6), pages 589-602, November.
    7. Hercules E. Haralambides, 2019. "Gigantism in container shipping, ports and global logistics: a time-lapse into the future," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(1), pages 1-60, March.
    8. Harilaos N. Psaraftis & Christos A. Kontovas, 2016. "Green Maritime Transportation: Speed and Route Optimization," International Series in Operations Research & Management Science, in: Harilaos N. Psaraftis (ed.), Green Transportation Logistics, edition 127, chapter 0, pages 299-349, Springer.
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    Cited by:

    1. Harilaos N. Psaraftis & Christos A. Kontovas, 2020. "Decarbonization of Maritime Transport: Is There Light at the End of the Tunnel?," Sustainability, MDPI, vol. 13(1), pages 1-16, December.
    2. Thalis P. V. Zis & Harilaos N. Psaraftis, 2022. "Impacts of short-term measures to decarbonize maritime transport on perishable cargoes," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 602-629, September.
    3. Beullens, Patrick & Ge, Fangsheng & Hudson, Dominic, 2023. "The economic ship speed under time charter contract—A cash flow approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    4. Paula Pereda & Andrea Lucchesi & Thais Diniz & Rayan Wolf, 2023. "Carbon Tax in the Shipping Sector: Assessing Economic and Environmental Impacts," Working Papers, Department of Economics 2023_04, University of São Paulo (FEA-USP).
    5. Yifan Wang & Laurence A. Wright, 2021. "A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation," World, MDPI, vol. 2(4), pages 1-26, October.
    6. Harilaos N. Psaraftis & Christos A. Kontovas, 2020. "Influence and transparency at the IMO: the name of the game," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(2), pages 151-172, June.
    7. Ge, Fangsheng & Beullens, Patrick & Hudson, Dominic, 2021. "Optimal economic ship speeds, the chain effect, and future profit potential," Transportation Research Part B: Methodological, Elsevier, vol. 147(C), pages 168-196.
    8. Harilaos N. Psaraftis & Thalis Zis, 2021. "Impact assessment of a mandatory operational goal-based short-term measure to reduce GHG emissions from ships: the LDC/SIDS case study," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 21(3), pages 445-467, September.
    9. Ghaforian Masodzadeh, Peyman & Ölçer, Aykut I. & Ballini, Fabio & Christodoulou, Anastasia, 2022. "How to bridge the short-term measures to the Market Based Measure? Proposal of a new hybrid MBM based on a new standard in ship operation," Transport Policy, Elsevier, vol. 118(C), pages 123-142.

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