The economic impacts of restricting black carbon emissions on cargo shipping in the Polar Code Area

• Main Author: Kong, Qingxu
• Other Authors: Jiang, Changmin (Supply Chain Management), Gajpal, Yuvraj (Supply Chain Management), Li, Hong (Warren Centre for Actuarial Studies and Research)
• Format: Master Thesis
• Language: English
• Published: 2021
• Subjects: Black carbon; Arctic; Shipping; Polar Code Area; Northwest Passage; black carbon; Northwest passage; Sea ice
• Online Access: http://hdl.handle.net/1993/35745

Since black carbon (BC) has become one of the most harmful pollutants and partly accelerated the melting of the Arctic sea ice, internationally mandatory policy to limit black carbon emissions in the whole Polar Code Area is on the agenda. To cope with this policy, some potential measures from both the coastal government and the shipowners, as well as the economic impacts of these measures, are considered in this paper. We analyze the daily navigation profits and the corresponding BC emissions after these measures are adopted. Since equipment-related cost is usually regarded as fixed and cannot be calculated on a daily basis, this paper also proposes an equipment investment payback period to access the time needed to achieve a balance between the investments and the profits of applying the equipment. A case of a dry bulk carrier navigating through the Northwest Passage is presented for concrete quantitative analysis. The results indicate that wind propulsion system can help shipowners mitigate the largest amount of BC emission. Wind-driven generators, which are used for auxiliary generating system, are the most economic-beneficial to shipowners under the current technology environment. Besides, we found that BC emission tax rate set by coastal governments plays an important role in the selection of different measures by shipowners. October 2021