By Junko Kobayashi – Besides the global downturn in trade and rise of high-scale piracy attacks, how to deal with climate change in the shipping industry will be high on the agenda this year. International shipping greenhouse gas (GHG) emissions are now being considered for inclusion in the overall targets to be set by the parties to the United Nations Framework Convention on Climate Change (UNFCCC). The new international agreement, which is to be negotiated in Copenhagen at the end of this year, will succeed the Kyoto Protocol on climate change which had exempted non-land-based transport from the targets. The shipping industry has been actively engaged in recent official and informal discussions on climate change and developing innovative ways to deal with it.
On a per ton, per mile basis, shipping is the most environmentally friendly and energy-efficient common means of transport. According to the United Nation’s International Maritime Organisation (IMO) responsible for regulating shipping, maritime transport carries as much as 90 percent of world trade by volume but only accounts for 10 percent of the transport sector emissions. Road transport is the biggest emitter, accounting for as much as three-fourths of the transport sector emissions. Still, emissions from the shipping industry in aggregate terms are significant, and contributed to 3.5 percent of all global emissions in 2008. This figure is also expected to rise over time with the expansion of global trade.
For the shipping industry to address climate change is not only an international obligation but it is also in its self-interest. What is commercially profitable is also beneficial to the environment in many cases. Speed reduction, new engine technology, and ship design will help increase fuel efficiency, and therefore reduce shipping costs as well as GHG emissions. These developments will also promote the industry’s environmentally friendly image. Some shipping companies have adopted the speed reduction approach to cut their operating costs during the 2008 record rise in oil and bunker prices. Moreover, alternative fuel such as natural gas, solar, wind, and nuclear power are now being considered by the industry. The shipping industry also needs to take climate change seriously because infrastructure, vehicles, and logistics of maritime transport will be adversely affected by the impacts climate change including high temperatures, sea level rise, floods, inundations, and extreme weather events.
Regulatory and institutional developments are also being made. Last year, the IMO formally adopted radical revisions to Annex VI of the International Convention for the Prevention of Marine Pollution from Ships (MARPOL) stating that the sulfur content of fuel will be progressively reduced globally to 0.5 percent by 2020, and in sensitive coastal areas to 0.1 percent by 2015. The IMO has also recently established an Energy Efficiency Design Index for new ships, an Energy Efficiency Operational Index for all ships, and best practice guidelines for the whole shipping industry.
The IMO’s major task ahead is to develop an acceptable binding international framework for regulating maritime GHG emissions in preparation for the Copenhagen Conference this December. The European Commission has been taking the lead in support of reducing shipping and aviation emissions, and has claimed that it will take unilateral action if the wider international shipping community does not act quickly enough. However, developing an agreeable framework and obtaining a global consensus will not be easy. A decision needs to be made on whether emissions reductions should apply to just developed nations listed in Annex I of the UNFCCC or to all nations. The IMO’s Secretary-General Efthimios Mitropoulos believes that the regulation should be applied to all ships because otherwise, it would only cover a fourth of the world’s merchant fleet and would not effectively address climate change or benefit the environment as a whole. But action to reduce carbon emissions from ships is strongly opposed by countries like Brazil, China, India, and South Africa. Other developing countries are also concerned about losing trade competitiveness, and about lack of technical and institutional capacity in meeting international standards.
Even after an international agreement for emissions reduction is reached, it would be difficult to monitor compliance. The shipping industry presents a particular challenge as to which nation will be held responsible for GHG emissions, since the emissions are largely generated outside national boundaries. Ships may also be linked to multiple nations through registration, ownership, operation, as well as origin and destination of cargo.
Junko Kobayashi is a Research Associate with the Stimson Center’s Regional Voices: Transnational Challenges project.