1. Carbon Dioxide Emissions: Effects, Costing and Mitigation Measures
Dr Zabi Bazari | GMN Consultant
Workshop Title | Dates | Mombasa, Kenya
The Global MTCC Network (GMN) project
is funded by the European Union and implemented by IMO
The views expressed in this presentation
can in no way be taken to reflect the views of the European Union

2. Content 1 GHG emissions and their impacts 2 Cost of CO2 3
Mitigation measures and barriers 1 2 3 4
Technology cost-effectiveness 5
Conclusions

3. GHG Emissions Impacts

4. CO2 share of GHG emissions
Carbon dioxide: Most of the atmospheric GHG emissions. From many sources.
Methane: Agriculture, livestock, mining, transportation, sewage and natural gas.
Nitrous oxide: Mainly from industrial agriculture fertilizers.
Halocarbon (Fluoro gases): Non- natural. Extensively used as refrigerants.
Other gases like ozone or water vapour have GHG properties.
Global anthropogenic GHG emissions
Source: IPCC AR4
In shipping, more than 99% of GHG emissions are CO2

5. Shipping air emissions and their impacts
IMO 2nd GHG study 2009 . 5

6. Main impacts of GHG emissions
Global warming (temperature rise)
Climate change
Ice cap melting
Desertification
Sea level rise
Oceans acidification
Associated costs

7. Millions are suffering from ever more intensive weather events in Asia and the Americas

8. And millions are affected from flooding8

9. and too much water in some places

10. ... or no water at all

11. Climate change impact on oceans
Oceans as a sink: Oceans are a major sink for CO2 emissions. Oceans properties change as a result.
Oceans acidification: Due to absorption of CO2 and acid rains. A lower pH by 0.1 units already in place.
Ocean dilatation (sea-level rise) endanger the coastal ecosystems and accelerates erosion.
Impacts on:
Marine habitats
Costal areas
Some land areas may disappear

12. GHG Associated Costs Fuel cost (internal cost)
CO2 social cost (external cost)

13. Cost of fuel to the economy
Industrial activities are impacted by price/cost of fuel.
This will depend on energy intensity of the industrial activities:
The more energy intensive, the more is the cost of fuel relative to other costs of production.
Transportation is generally an energy intensive industry.
Shipping fuel cost is a major part of total shipping costs.

14. Social cost of CO2
The social cost of carbon is an estimate of the net damages to the society.
It is estimated for a single additional tonne of CO2 in a given year.
It is the net cost associated due to all impacts:
Changes in agricultural productivity, risks to human health, damage to ecosystem, floods, etc. 
Social cost allows to translate reductions of carbon dioxide emissions into monetary benefits.

15. Steps to estimate social cost of CO2
Four key steps of social cost of carbon dioxide estimation:
Step 1 : The projection of future socio-economics and emissions
Step 2: The translation of emissions into climate change
Step 3: The translation of climate change into damages to human welfare
Step 4: The discounting of damages over time
Due to uncertainty in every step, various assumption should be made.
Based on various scenarios, a number of predictions are made.

16. How social cost of CO2 is estimated
The estimated social cost of CO2 is varied and depends on various assumptions that are made.
Complex models are used to cater for various damages.
Example of social cost estimates by USA EPA.
The cost is per tonne CO2 and is dependent on the year.
Source: EPA Factsheet, December 2016
Sensitive to discount rate
High impact cases if happens, the cost will be higher.

17. Benefits of CO2 mitigation
Reduction of direct cost to society/industry in the form of less fuel (energy) cost.
Reduction of social cost to society in mitigating the negative impacts.
So, energy efficiency is a win-win scenario for economy as well as for environment (society)

18. Mitigation Measures

19. Mitigation efforts in industries
CO2 mitigation follows same pattern in various industries.
They are normally tackled in three aspects:
Energy efficient design of industrial processes
Energy efficient operation of industrial processes
Alternative sources of energy
To achieve the above objectives, national/international standards are developed.
Design standards/regulations that deal with process and technology design.
Operational standards/standards for energy management and best practice

20. Mitigation related typical standards/regulations
Examples of design standards/regulations:
EEDI for ships
Fuel economy standards for cars
Energy labelling standards for buildings, cars, household appliances, etc.
……..
Examples of operational standards/regulations:
ISO on “energy management system”
SEEMP for ships
Standards for GHG / fuel consumption measurement, verification and reporting,
Standards for energy audits
…….

21. MBM as a mitigation measure
Market Based Measures (MBM) are strong market instruments that could be used to accelerate the GHG mitigation efforts.
Main aim of an MBM system for GHG mitigation could be:
Encourage development of eco-ships
Encourage eco-shipping
Encourage use of alternative fuels in ships
Ensures that globally, the level of emissions are capped
Etc.
Other reasons why some may encourage use of MBM:
Ensure that the polluter pays for its negative impacts
Generate new revenue
Create jobs and employment
Promote and expand the finacial markets
Create a level playing field between transport modes.

22. Shipping specific CO2 mitigation measures
Technical
Hull form
Efficiency rudders
Hull air cavity
Propeller boss cap fins
Foul release paints
Waste heat recovery
Fuel cells
Variable speed drives
Energy efficient electric motors
Etc.
Operational
Itinerary management
Ballast exchange
Tank cleaning
Cargo heating
Cargo handling
Etc.

23. Main barriers to mitigation efforts
Eco-ship:
Availability of new technologies.
Economic cost-effectiveness.
Etc.
Eco-shipping:
Split incentives
Uncertainty in saving levels: Measurement and verification
Economic cost-effectiveness
Alternative fuels:
Lack of infrastructure
Lack of availability
Price competitiveness

24. MACC for measurement of cost-effectiveness
Marginal Abatement Cost Curves (MACC) are used to show potential CO2 reduction of each technology and associated costs/benefits.
MACC shows the reduction potential (tonne/year) and abatement cost ($spent/tonne CO2 reduction) on one diagram.
Cost-effectiveness of technologies are measured by pay-back periods or NPV (Net Present Value).
A large number of MACC has been produced by various organisations.
In general, we need a MACC for each ship type and size to be able to identify best methods of CO2 reductions.

25. How to estimate the MAC MACC is derived using the following data:
Cost of fuel-saving measures
The fuel saving potentials
The fuel price
The discount rate
Etc.
Data should be specified for each ship type, size and age.
K capital cost discounted by interest rate; S service cost, O opportunity cost; E is energy cost reduction, α is fuel reduction rate, F original fuel consumption, CF carbon factor

26. MAC Curve for international shipping
Source: DNV 26 26

27. IMO Technology Appraisal tool
It is an excel-based tool.
Developed by DNV-GL
Has an interface (dashboard) that one could control inputs and see the output results.

28. IMO Technology Appraisal Tool

29. Cost of technologies / measures
The financial data is hard to acquire.
However, there are general cost numbers for various technologies.
DNV-GL has performed a study for the IMO and included these numbers in the IMO Technology Appraisal tool.
A review of these details can be seen in the IMO Tool
IMO Technology Appraisal Tool

30. Conclusions CO2 is the main GHG emissions.
The majority of CO2 is due to burning of fossil fuels.
In shipping, more than 99% of GHG emissions are CO2.
The main impact of CO2 emissions:
Global warming
Rising sea levels
Ocean acidity
Economic impacts of CO2:
High cost of energy to economy
High social cost on the society

31. Conclusions Main mitigation measure is the move to Low Carbon Shipping
Technical and operational regulations and standards are in place to force industry to move in this direction.
MBM is another market technique to support the above.
One of the barriers to use of measures are economic cost- effectiveness.
Estimation of Marginal Abatement Cost (MAC) is one way of measuring cost-effectiveness.
A tool is developed by IMO to support the MAC analysis of shipping measures.

32. Thank you for your attention!