An agent-based model of climate-energy policies to promote wind propulsion technology in shipping

Abstract The global trade share of international shipping is approximately 80% and it is therefore critical to the global economy. Carbon emissions from international shipping are expected to increase significantly in line with global trade trends. Several niche technologies for ship propulsion provide solutions to reduce shipping CO 2 emissions. These technologies face innovation barriers that potentially limit their diffusion. An agent-based model is developed to explore the effect of imperfect agent information and split incentives barriers that current shipping models omit. A transitions perspective is adopted to analyze the diffusion of Flettner rotor technology in time charter drybulk shipping with the model. Simulation results are more conservative compared to those models and show how barriers impact the diffusion of rotor technology, even on favourable shipping routes. The simultaneous introduction of carbon pricing and demonstration projects greatly increases CO 2 emission reductions to 2050 relative to either policy introduced in isolation.