Carbon leakage provides an efficiency argument for unilateral climate policy to differentiate emission prices in favor of emission-intensive and trade-exposed sectors. At the same time, differential emission pricing can be (mis-)used as a beggar-thy-neighbor policy to exploit terms of trade....

The maritime transport sector (henceforth shipping sector) can be seen as the backbone of globalization since it transports 80% of the merchandise traded internationally (UNCTAD, 2008). It transported about 8.4 billion tons of merchandise throughout the world in 2010 (UNCTAD, 2011). Needless to...