As the prospect of a carbon tax on shipping looms, battle lines are being drawn by the sector’s influential organisations
With the pivotal Conference of the Parties to the Kyoto Protocol taking place at the Paris Climate Change Conference in November (COP 21), ships and what comes out of their stacks are under the microscope.
Six weeks out and tensions are already flaring. OECD’s think-tank the International Transport Forum published its position paper warning that shipping needs to halve its greenhouse gas emissions by 2050 to meet the goal of keeping global warming within a 2°C pathway.
Yet while better energy efficiency of ships, lower speeds, higher utilisation, improved ship designs and alternative energy sources will to some extent mitigate ship emissions, more needs to be done.
The ITF has called for a target for shipping emissions, an action plan for implementation and a carbon tax for shipping, the receipts of which could feed into a Green Climate Fund. It describes a carbon charge for shipping as “administrative simplicity”, stating that it would be easier to implement than any other Market-based Mechanism. It supports a “marginal tax” of $25 per tonne of CO2.
“While shipping may currently have CO2 emissions comparable to a major OECD economy, it is inappropriate for the ITF to propose that the industry should be treated like an OECD economy”
But this has prompted a stiff rebuttal from the International Chamber of Shipping, which claims that a tax of that level would be “almost three times higher than the carbon price paid by shore based industries in developed nations”.
“While shipping may currently have CO2 emissions comparable to a major OECD economy, it is inappropriate for the ITF to propose that the industry should be treated like an OECD economy,” said ICS secretary general, Peter Hinchliffe.
According to ITF research, shipping emissions have doubled since 1990 and CO2 emissions from maritime transport in 2050 are projected to be between 50% and 250% higher than current levels, depending on how global trade increases under different scenarios.
The 0.8bn tonnes of CO2 emissions emitted globally by shipping in 2012 – the latest figures available – accounted for 2.2% of worldwide carbon emissions. Building on these figures with the projected scenarios, shipping emissions in 2050 could represent up to 14% of the total global emissions.
For shipping to meet a 2°C target by 2100 as set out in the 2009 Copenhagen Agreement, it would have to cut CO2 emissions from its ships to 0.4bn tonnes by 2050 and achieve zero carbon emissions by 2080, says the ITF.
However, the ICS disputes the ITF’s figures, stating that shipping has already reduced its total CO2 emissions by more than 10% (2007-2012) and CO2 per tonne-mile by around 20% (2005-2015), making it on course for carbon neutral growth.
“The position of ICS remains that if IMO Member States should decide to adopt a shipping Market-based Mechanism, the industry’s clear preference is for a fuel levy, rather than an emissions trading scheme or other complex alternatives that would distort global shipping markets,” says the ICS.
“However, if a levy was developed by IMO, ICS believes that any money collected should be proportionate to international shipping’s share of the world’s total CO2 emissions (2.2% in 2012 compared to 2.8% in 2007), not the $26bn a year suggested by the ITF.”
That said, the ITF’s Olaf Merk points out that a fundamental problem facing the industry is that the IMO and the United Nations Framework Convention on Climate Change (UNFCCC) have different principles on climate change. “While the UNFCCC advocates ‘common but differentiated responsibilities’, the basic principle of the IMO is ‘no more favourable treatment’. The latter principle (which holds that ships flying the flags of countries that have not yet ratified IMO conventions will still be required to meet the convention’s stipulations) is applied because shipping is a global business with a lot of possibilities of avoiding national regulations by de-flagging ships to flag states with less stringent regulation.
“This has happened to a massive extent over the past decades, with the result that the majority of ships are now registered in developing countries. The challenge is thus to find measures that will be applied universally, with some sort of compensation for developing countries, for instance improving local capacity to implement IMO regulations, without subsidising shipping sectors in developing countries.”
The European Parliament has been quick to voice its support of slashed shipping emissions, warning that the sector needs to initiate measures to curb emissions by the end of 2016. The Parliament has recommended that the EU and its member states call for a 40% cut in greenhouse gas emissions by 2030 and scale up climate finance commitments at the COP 21 climate talks. MEPs also say a share of revenues from the EU’s carbon market allowances should be earmarked for climate finance, and that the aviation and shipping sectors have an important role to play.
“We are facing the fight of the century. If we do not succeed in preventing global warming from exceeding 2 degrees C by the end of the century we will see many more droughts, floods, melting glaciers and the disappearance of more and more farm land. Climate change will also be a factor in increasing the migration problem,” said Gilles Pargneaux, representing France’s Group of the Progressive Alliance of Socialists and Democrats in the European Parliament. Mr Pargneaux drew up this resolution calling for faster action on curbing shipping emissions, which makes up the mandate for Parliament’s delegation to COP 21.
Mr Pargneaux’s resolution calls on the EU to demand a reduction of at least 40% of greenhouse-gas emissions compared to 1990 levels; a 40% energy-efficiency target; and a 30% target for renewable energy by 2030.
“The financial issue is and will be the cornerstone of an agreement in Paris. This is why we are calling for a clear roadmap from the member states so that we know how to finance the green fund from 2020. Fixing a carbon price at global level would also help to ensure that the least-polluting technologies are the most attractive to investors,” added Mr Pargneaux.