The International Chamber of Shipping (ICS) – the principal international trade association for ship operators representing all sectors and trades and over 80% of the world merchant fleet – has called on delegates at the United Nations Climate Change Conference (COP 17) in Durban, to give the International Maritime Organization (IMO) a clear mandate to continue its work on regulating shipping’s CO2 emissions, including the development of Market Based Measures.
ICS explained that shipping is committed to improving efficiency per tonne-km by 20% by 2020 with further significant improvements thereafter, and that the achievement of this goal would be greatly assisted by the recent IMO agreement on technical regulations to reduce shipping’s emissions.
Speaking alongside IMO officials on 29 November at a special UNFCCC event on international transport, ICS Director of External Relations, Simon Bennett, said that it was “no secret that Market Based Measures are controversial. However the shipping industry recognises that the need to prevent climate change is a political challenge as much as a technical one, and that shipping needs to play a constructive part in the discussion about MBMs.”
As demonstrated by the recent IMO agreement on technical measures, ICS believes that IMO is eminently capable of continuing its discussions on Market Based Measures which, if governments so decided, could also involve a linkage to any ‘Green Fund’ that is established by UNFCCC.
However, ICS suggested that the high cost of fuel means that shipowners already have every incentive to improve their efficiency. Governments must also avoid the possibility of modal shift since if excessive costs are added to shipping there could be greater use of less carbon efficient shore-based transport modes which would generate additional CO2.
ICS is also concerned that some governments appeared more interested in how much money could be raised from shipping rather than the emissions reductions that this might deliver. ICS argues that shipping should not be treated as a ‘cash cow’, and that any financial contribution that it might be required to make should be proportionate to its share of the world’s total emissions.
ICS also repeated that the clear preference of the majority of the shipping industry – if governments decided to implement a shipping MBM – is for an IMO compensation fund linked to fuel consumption, rather than a system based on emissions trading. Most shipping companies, perhaps 90%, are small to medium sized enterprises that have a sound dislike of unnecessary complication. An IMO compensation fund linked to fuel consumption is therefore the option with which most shipping companies could probably accept and support, if agreed by governments at IMO.
Above all, ICS argues that it is vital for all governments to understand that in the absence of a global framework to address shipping’s CO2 there is a serious risk of regional unilateral measures for shipping. This would be far less effective in delivering meaningful efficiency improvements by the global shipping sector as a whole.