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Green Shipping: A Legal Evaluation of the Contractual Mechanisms by Private Industry Actors to achieve a Sectoral Transition

Rebelo, P. (2021). Green Shipping: A Legal Evaluation of the Contractual Mechanisms by Private Industry Actors to achieve a Sectoral Transition. (Unpublished Doctoral thesis, City, University of London)

Abstract

Achieving the United Nations Sustainable Development Goals and economic recovery following the Covid-19 pandemic will require maritime fleet expansion for increased trade flows and supply chain stability. Sectoral growth is inevitable as global trade upsurges and wide-scale infrastructure developments, such as the People’s Republic of China’s Belt and Road initiative, expand into developing nations. However, increased fleet capacity is also directly proportional to the impact that shipping has on the marine environment. The maritime sector has not been included in the Kyoto Protocol and the subsequent Paris Agreement based on the persistent notion that the International Maritime Organisation (IMO) can adequately regulate pollution from shipping. Critics of the IMO feel that it is failing at the task of aligning the sector with a sustainable development agenda and climate change targets. In particular, the IMO’s decision to not cap carbon emissions, but to rather implement a non-prescriptive, performance-based mechanism, technical standard known as the Energy Efficiency Design Index, is contentious given the urgent call to keep the increase in global average temperature below 2°C above pre-industrial levels.

However, this thesis does not engage in discourses about the effectiveness of the IMO’s pollution regime for shipping. Rather, it views the task of ‘greening’ the sector as a collaborative agenda comprising of both top-down standard-setting and bottom-up initiatives adopted by private actors. This thesis asserts that the IMO’s role in environmental governance is but one component of improving the overall environmental performance of the maritime sector. Instead, this thesis focuses on the greening of everyday transactions between private actors that support crucial shipping activities, many of which may fall outside of the jurisdiction and enforcement powers of IMO member states. A focus on private actors is justified by an overarching theoretical framework of a contract governance approach to contract theory. Contract governance contemplates a wide range of rule and decision makers, recognising that the public law and private law can contribute to restoring party autonomy in furtherance of a common goal. Where there are weak spots in the regulatory regime, private law mechanisms and devices can assist in obtaining the overall objectives of the state-implemented regime. However, this would call for a modernisation of contract law for greater alignment with external frameworks and normative agendas.

This thesis poses one major research question: How contractual mechanisms should be developed to facilitate and increase incentivisation of the green shipping transition? This question is placed in various contexts as categorised by a vessel’s lifespan. The research question therefore asks how various commercial transactions can obtain this goal. In the pre-voyage phase, a vessel’s construction is predominantly supported by financing and shipbuilding agreements. In its voyage phase, the carriage of goods is supported by a number of contracts, including chartering arrangements. When a vessel reaches its end of life, dismantling and recycling sale agreements dictate how the vessel is to be disposed of. All of these essential transactions have the potential to elevate a set of green principles that will guide how parties exercise their freedom of contract.

Publication Type: Thesis (Doctoral)
Subjects: H Social Sciences > HE Transportation and Communications
H Social Sciences > HF Commerce
K Law
Departments: Doctoral Theses
The City Law School
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