Bridging the Energy Efficiency Gap in Shipping: The case of Principal-Agent Problems in operational emission reduction measures

Christos A. Kontovas, Harilaos N. Psaraftis

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Recent literature identifies several measures and practices that have a great potential to reduce ship air emissions. Interestingly enough, some of them have negative abatement costs, i.e. the use of such measures would lead to reductions in Greenhouse Gas (GHG) emissions and entail economic benefits leading to a win-win scenario. However, most of these measures are not adopted. Indeed, there is a vast amount of literature that tries to explain why companies fail to invest in energy efficiency even though it is, or is perceived to be, profitable - a “phenomenon” that is also commonly referred to as the “energy efficiency gap”. In the shipping industry, most works have identified the socalled Principal Agent problem, or split incentives barrier as a fundamental one. The paper identifies the cases where this kind of problem may occur. Finally, the paper presents barriers and ways to overcome them (such as the “Virtual Arrival” Incentive) in the case of operational measures that are mainly related to slow steaming.
Original languageEnglish
Publication date2013
Number of pages20
Publication statusPublished - 2013
Externally publishedYes
EventInternational Association of Maritime Economists Conference (IAME 2013): “Managing complexity in shipping and port markets" - Marseille, France
Duration: 3 Jul 20135 Jul 2013

Conference

ConferenceInternational Association of Maritime Economists Conference (IAME 2013)
CountryFrance
CityMarseille
Period03/07/201305/07/2013

Keywords

  • Ship emissions
  • Energy efficiency gap
  • Split incentives
  • Virtual arrival

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