Designing effective policy instruments for decarbonising marine transportation: a system dynamics approach

Decarbonising its extensive, fossil-fuel-reliant maritime sector is crucial for Indonesia, which seeks to balance economic growth with its role in global climate change mitigation. This study uses a detailed System Dynamics (SD) model to evaluate the long-term effectiveness of diverse decarbonisation strategies by assessing their impact on economic and environmental dimensions within the Indonesian marine sector. We compared three policy pathways: continuing current practices (Business as Usual), a gross tonnage (GT) ship policy, and a carbon emission regulation framework utilising tokens. Findings identify the Carbon Token approach as the most promising for long-term sustainability, projecting an over 92% emission cut by 2045 alongside significant financial gains. GT-based policies offer short-term economic boosts but risk environmental compromise. We recommend integrated, sustainable policies to guide Indonesia towards an economically sound, ecologically responsible, low-carbon maritime future. A green shipping transition is possible and beneficial.