Bridges Trade BioRes • Volume 9 • Number 2 • 6th February 2009

EC Wants Shipping in Copenhagen Agreement

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European Environment Commissioner Stavros Dimas wants shipping to be included in the climate change deal that succeeds the Kyoto Protocol. While global shipping is thought to contribute as much as 3 percent of overall carbon dioxide emissions, several complex factors forced its exclusion from Kyoto. Since then, shipping has largely been left out of climate change initiatives.

Organisations representing the industry, such as the International Maritime Organization (IMO), have resisted such an inclusion in the past, arguing that the current lack of mitigation solutions for the sector would make compliance difficult. Moreover, critics argue that the current nature of the UN Framework Convention on Climate Change (UNFCCC) would place a disproportionate burden on Annex 1 (developed) countries.

The IMO has been moving ahead with its own plans for curbing emissions in the industry. However, stumbling blocks, such as how to account for the common yet differentiated responsibilities among countries - particularly between developed and developing countries - have made progress difficult (see Bridges Trade BioRes, 17 October 2008, http://ictsd.net/i/news/biores/31319/).

Long-range transport ships are typically powered by large diesel engines using dirty ‘bunker’ or ‘residual’ fuel. While the European Commission has hired consultants to help find technical solutions to the problem, the 28 January proposal could compel agencies - such as the IMO - to help seek out new ways of reducing the high carbon dioxide emissions resulting from bunker fuels.

“It would still be left to IMO to find solutions,” said Alfons Guinier, secretary-general of the European Community Shipowners’ Association (ECSA). “The IMO would be expected to come forward with proposals.” The commission says that if the IMO fails to implement an acceptable plan by the end of the year, it will take regional action.

Background

The IMO estimates that the worldwide fleet of 90,000 ships transports 90 percent of the world’s goods. Shipping has grown by an average three percent annually over the last three decades, and shipping emissions are projected to grow as global trade expands. According to Intertanko, the global association of tanker owners, shipping emissions are set to rise by a further 30 percent by 2020, making shipping one of the main sources of greenhouse gases, following land transport, housing, agriculture and industry.

In the past few decades, the international community has taken steps to reduce emissions from other sectors, but the shipping industry has been left behind. Efficiency and environmental standards on shipping fuel have been largely ignored due to the distance between the ships and the noticeable impact on the environment on land.

Nature of industry presents unique challenges

Observers say that the nature of the international trade system makes the implementation of an industry-wide cap unlikely. “The amount of shipping required is simply a function of trade,” a spokesman for the International Chamber of Shipping told Reuters recently. “If the world population and economy continue to expand, shipping will need to expand too.”

Similar criticism over the inclusion of shipping into the successor to the Kyoto Protocol - to be hammered out when delegates meet in Copenhagen in December - lies in the nature of the shipping registry system, in which a mere 25 percent of the world’s merchant ships are registered in developed countries. Critics argue that selective registration provides a loophole if UNFCCC compliance remains voluntary for developing countries.

The current EC proposal includes an emissions trading scheme for shipping and the aviation industries, which also rely heavily on the use of bunker fuels. Some critics, including French ship-owners, say that a levy or fuel tax system would be preferable.

Dimas says he will ask EU member states to endorse the plan to include shipping and aviation into the Copenhagen agreement in March.

Copenhagen Talk Heating Up Early

Bunker fuel wasn’t the only climate change issue in the news recently.

Last week, news was leaked that the EU plans to propose a tax that would raise some US$ 200 billion from developed countries to help pay for mitigation and adaptation initiatives in the developing world. The plan is set out in a paper that outlines the EU’s position on climate change in the lead up Copenhagen.

Climate change was also under the spotlight at the annual World Economic Forum, held last week in Davos, Switzerland. While participants generally acknowledged that the obstacles presented by the global economic downturn could make reaching a deal in Copenhagen difficult, members released a statement calling for clean energy investments of more than US$ 515 billion per year - three times current levels.

European Energy Commissioner Andris Piebalgs cited this, combined with a recent EU funding announcement for carbon capture and storage and Barack Obama’s backing for climate change initiatives, as proof that there is room for optimism. “There is a new chance for green growth,” Piebalgs told Reuters. “It is important to see the silver lining.”

“Brussels calls for shipping to enter new climate change pact,” LLOYD’S LIST, 28 January 2009; “EU wants airlines, ships in post-Kyoto pact,” REUTERS, 21 January 2009; EU to propose $200 bln climate tax on rich nations,” REUTERS, 22 January 2009.