Cost-effectiveness assessment of CO2 reducing measures in shipping

International shipping is a significant contributor to global greenhouse gas (GHG) emissions, and is under mounting pressure to contribute to overall GHG emission reductions. There is an ongoing debate regarding how much the sector could be expected to reduce emissions and how the reduction could be achieved. This paper details a methodology for assessing the cost-effectiveness of technical and operational measures for reducing CO₂ emissions from shipping, through the development of an evaluation parameter called the Cost of Averting a Tonne of CO₂-eq Heating, CATCH, and decision criterion, against which the evaluation parameter should be evaluated. The methodology is in line with the Intergovernmental Panel on Climate Change (IPCC) and with regulatory work on safety and environmental protection issues at the International Maritime Organization (IMO).

The results of this study suggest that CATCH <50 $/tonne of CO₂-eq should be used as a decision criterion for investment in emission reduction measures for shipping. In total, 13 specific measures for reducing CO₂ emissions have been analysed for two selected case ships to illustrate the methodology. Results from this work shows that several measures are cost effective according to the proposed criterion. The results suggest that cost effective reductions for the fleet may well be in the order of 30% for technical measures, and above 50% when including speed reductions. The results of this study show that the cost effectiveness approach for the regulation of shipping emissions is viable and should be pursued in the ongoing regulatory process.     

Regulating the regulator: The impact of professional procuring bodies on local public transport policy and its effectiveness

During the past 15 years competitive tenders have become a common procedure when procuring local bus services in Europe. In particular, tenders with gross cost contracts and the so-called Scandinavian model have gained popularity, resulting in a vast amount of research on optimal contractual relationships between government and operators. This paper pays attention to a rather neglected part of the Scandinavian model: the construction of professional procuring bodies and their relationship to the local public administration, focusing on its implications for policy steering and service performance.The paper outlines briefly two different perspectives of analyses of organisational models: one perspective is anchored in principal-agent theory and institutional economics; and the other perspective in political science. Empirically, the article is based on an evaluation of the relation between two Norwegian counties and the administrative company responsible for planning and procuring public transport services. This evaluation indicates, firstly, important common challenges for the county administration due to lack of regional administrative competencies in relation to the administrative company, which also hampers the county’s role as coordinator of policy areas of importance for public transport. Secondly, due to increased transaction costs, the establishment of administrative companies does not seem compatible with contracts relying on net cost solutions with huge scope for operator initiatives.     

Future cost scenarios for reduction of ship CO2 emissions

International shipping is a significant contributor to Global Greenhouse Gas (GHG) emissions, responsible for approximately 3% of global CO₂ emissions. The International Maritime Organization is currently working to establish GHG regulations for international shipping and a cost effectiveness approach has been suggested to determine the required emission reductions from shipping. To achieve emission reductions in a cost effective manner, this study has assessed the cost and reduction potential for present and future abatement measures based on new and unpublished data. The model used captures the world fleet up to 2030, and the analysis includes 25 separate measures. A new integrated modelling approach has been used combining fleet projections with activity-based CO₂ emission modelling and projected development of measures for CO₂ emission reduction. The world fleet projections up to 2030 are constructed using a fleet growth model that takes into account assumed ship type specific scrapping and new building rates. A baseline trajectory for CO₂ emission is then established. The reduction potential from the baseline trajectory and the associated marginal cost levels are calculated for 25 different emission reduction measures. The results are given as marginal abatement cost curves, and as future cost scenarios for reduction of world fleet CO₂ emissions. The results show that a scenario in which CO₂ emissions are reduced by 33% from baseline in 2030 is achievable at a marginal cost of USD 0 per tonne reduced. At this cost level, emission in 2010 can be reduced by 19% and by 24% in 2020. A scenario with 49% reduction from baseline in 2030 can be achieved at a marginal cost of USD 100 per tonne (27% in 2010 and 35% in 2020). Furthermore, it is evident that further increasing the cost level beyond USD 100 per tonne yield very little in terms of further emission reduction. The results also indicate that stabilising fleet emissions at current levels is obtainable at moderate costs, compensating for fleet growth up to 2030. However, significant reductions beyond current levels seem difficult to achieve. Marginal abatement costs for the major ship types are also calculated, and the results are shown to be relatively homogenous for all major ship types. The presented data and methodology could be very useful for assisting the industry and policymakers in selecting cost effective solutions for reducing GHG emissions from the world fleet.     

Workshop report - A successful contractual setting

Successful public transport service contracts can be judged against procedural and outcome criteria, located within an integrated strategic, tactical and operational level framework for planning and delivery. Clear goal setting at the strategic level sets the basis for supportive tactical system planning and for service delivery that meets goals. The workshop considers relevant success criteria and key matters that need to be resolved for their achievement. Market growth potential and the governmental attitude to supporting service growth are important issues shaping the contractual environment. The growing interest in negotiated performance-based contracts and the role of trust between the operator and the authority are also matters for particular attention.     

Impact of regulation on the performances of long-distance transport services: A comparison of the different approaches in Sweden and Norway

Despite the many socio-economic similarities between Sweden and Norway, differences in jurisdiction, organisation, cooperation, and financing of long-distance passenger train and coach services have led to the development of four distinctively different ways of serving the markets. This paper describes how the train and coach markets have developed in the two countries, with emphasis on regulatory and industrial structure and a couple of performance variables.Looking at passenger rail, both countries separated infrastructure from operation over a decade ago. However, while Norwegian rail is characterised by an almost monopoly supplier, rail services in Sweden are partly decentralised to the responsibility of county authorities and are widely subjected to competitive tendering. The rest of the network is about to be opened up for on-the-track competition. Swedish Rail (SJ) has spent the last decades consolidating its core business (passenger rail) and sold out its other businesses. In contrast, the Norwegian state rail (NSB) has expanded its business to become a major bus operator and property owner, with extensions also into the Swedish market.The coach industry was more recently deregulated in both countries. The Swedish coach market is dominated by privately owned companies operating services to and from Stockholm. In Norway, state-owned NSB is a major coach operator on medium distance routes, and is also the largest partner of Nor-Way Bussekspress which totally dominates long-distance coach services. Further, the Norwegian coach market is characterised by cross-ownership and cooperation which has enabled an extensive route network which covers most of Norway.We find distinct differences in achievements in the two modes and in the two countries. Swedish rail services have succeeded in winning market shares and in renewing and developing both infrastructure and service levels to a greater extent than the Norwegian model. On the other hand, the Norwegian coach market seems to be more developed and efficient compared to its Swedish counterpart.The paper concludes with a discussion on the possible links between the different approaches and the performance observed, with the aim to stimulate further and more detailed research on some important issues.