Republic of Korea has promoted reduction of Greenhouse Gas, through implementation of Greenhouse Gas Emission Trading Scheme on inland high-emission sectors of the gas, in order to contain risk of environmental change. To the contrary, shipping sector is preparing systems to control greenhouse gas emission through comprehensive regulation on every merchant vessel of the world, under segmented approach of IMO(International Maritime Organization). In 2011, discussion has already been made in market-based measures on vessels, followed by technical & operational greenhouse gas regulation. Especially, Emission Trading System, one of traditional market-based measures, is being discussed with great emphasis.
However, when it comes to shipping industry, limitation exists in authorizing vessel operators stated in Safety Management Certificate (SMC), as argued in proposal of Emission Trading System, and in equally applying this system according to differences in method of possession, occupation and usage of vessel under contract structure. Contrary to the fact that Emission Trading System of inland sectors is implemented on point pollution sources, management of the proposed system in shipping sector is difficult due to vessel’s characteristic as non-point pollution source. Furthermore, although shipping industry is capital-intensive one, there are various difficulties, for example issue of response to the entry of Emission Trading System, resulting from discrepancy in manning level between global shipping giants and small and medium-sized companies.
In conclusion if Emission Trading System is considered for market based measure to reduce greenhoue gas from ships, polluter pays principle shall be strongly embodied in implementing the system through auction when it comes to allowance method. And to make sure the certainty of curbing the greenhouse gas emission as well as to reach the sustainable development of Non annexⅠ countries, the thesis emphasizes the limitation on using the credit created from some developing countries, and from industry related greenhouse gas.
Despite the anticipated problem and recommendation, as emission trading system requires sophisticated design for securing the effectiveness e.g. emission cap, emission allowance, MRV(Monitoring, Reporting and Verification), and submit credit etc, further studies are hopefully recommended to make better understanding.