The paper constructs a theoretical model of two countries which trade with each other by shipping firms to analyze the welfare effects of mechanism on greenhouse gas emission reduction of international shipping, and the different effects of emission reduction mechanisms on the developed and developing countries. The research finds out the implementation of the emission reduction mechanism: (1)the profit of the shipping firm of developing country must be reduced, but the profit of the shipping firm of developed country may not be reduced. If the shipping firm of developed country has obvious cost advantage, the profit will be improved. In most of the cases, the shipping firm of developed country suffers worse impact on profit. (2)The consumers' surplus of both countries will be reduced. If the transportation cost of the products is large relative to the market capacity, the profit of production firms of both countries will be increased; if the transportation cost of the products is small relative to the market capacity, the profit of production firms of both countries will be decreased. (3)If the shipping firm of developed country has a cost advantage which is large enough, its economic welfare will be improved; if the shipping firm of developing country has serious cost disadvantage, its economic welfare will be declined. If the cost difference between the two countries is small, and the transportation cost of the products is large relative to the market capacity, the economic welfare of both countries may be improved. (4)The total amount of carbon emissions will be reduced, and the environment has been improved. According to the above conclusions, the paper provides policy recommendations on the shipping firm, domestic industries, negotiation strategies and so on.