This thesis analyzes the design and effects of carbon pricing in the national and international freight transport sector, with a particular focus on maritime shipping. It brings together four papers that examine both short- and long-term behavioural responses and welfare effects of carbon pricing. The responses studied include reductions in sailing speed, changes in freight demand, investments in research and development (R&D) and learning-by-doing to reduce abatement costs through technological development, abatement of carbon emissions (e.g. alternative fuels), modal shifts, and adjustments in shipment sizes. The thesis also investigates the role of international cooperation and the incentives created by unilateral carbon pricing and carbon-intensity limits on marine fuels.
The first paper investigates short-run responses in the shipping sector and shows that ships reduce their sailing speed when fuel costs increase, indicating that carbon pricing can lower emissions even in the short run. The second paper studies carbon pricing in international shipping under the constraint that participating countries should be better off with the policy than without it. The results suggest that bilateral agreements can reduce emissions when countries differ in their willingness to pay, though their effectiveness is limited in static settings with high abatement costs. The third paper extends this analysis by considering the dynamic effects of unilateral carbon pricing. It shows that such policies can foster investments in research and development, thereby lowering future abatement costs and increasing the likelihood that other regions will adopt complementary policies.
The fourth paper broadens the perspective beyond shipping sector. Using a calibrated mode- and route-choice model for domestic freight transport in Sweden, it examines the welfare-optimal internalization of external costs from carbon emissions, air pollution, accidents, noise, and infrastructure. Internalizing external costs increases shipment sizes and shifts freight from waterborne and road transport to rail. However, the effects are modest, implying that the potential for large-scale modal shift from road to rail or waterborne transport is limited.
In summary, the thesis shows that reducing carbon emissions in the shipping sector is challenging for two main reasons: abatement is very costly, and reductions in freight volumes entail welfare losses. Moreover, shipping is an inherently international sector, where efficient carbon pricing would need to be globally coordinated, but this is hampered by large differences in the willingness to price carbon emissions across countries.
Overcoming these difficulties, the thesis underlines the importance of accounting for both short- and long-term behavioral responses, the role of international cooperation, and the dynamic incentives created by unilateral policies. The thesis is relevant for policymakers seeking to align maritime and freight transport policy with broader climate and welfare objectives.