A group of shipping associations from around the world have called for a ‘cap-and-trade’ system to reduce shipping CO2 emissions in a recent report.

The report – A Global Cap-and-Trade System to Reduce Carbon Emissions from International Shipping, prepared by the shipping associations of the UK, Australia, Belgium, Sweden and Norway – claims that a ‘cap-and-trade’ system will be the only way to guarantee an overall reduction in CO2 emissions from shipping.

The report says firms that emit CO2 should either buy or be provided with carbon allowances during the compliance period to cover emissions.

The mechanism will enable firms to review and manage their fleets more effectively while lowering emissions and encouraging innovation and technology, according to the report.

The associations are working with their respective governments to highlight the benefits of such a system ahead of the UN-led Copenhagen climate change conference where global leaders will work on a new agreement to replace the Kyoto Protocol to reduce greenhouse emissions.