PARIS CLIMATE DEAL: IMPLICATIONS FOR INTERNATIONAL SHIPPING

A  historical  climate  deal  was  reached  in  Paris  on  12  Dec  2015.  The  legally  binding agreement  which  has  been  touted  as  differentiated,  balanced,  durable  and  ambitious aims to limit the increase in the global average temperature to “well below 2 degree C”, above pre-industrial levels while “pursuing efforts to limit the temperature increase to 1.5 degree C”. But what if any, are the implications of the agreement for international shipping? And, how can the maritime sector contribute to mitigating global GHG emissions?

International Shipping and CO2 Emissions

If international shipping was a country it would be the seventh largest GHG emitter in the world, in the year 2014. However, international shipping which contributes to 2-3 per  cent  and  the  aviation  sector which  contributes  to  approximately  2  per  cent  of  the global carbon emissions were omitted from national commitments under the 1997 Kyoto Protocol. For the shipping sector, ships have different  port  of origin, destination port, intermediate  ports  of  call,  flag  state  of  the  ship  (country  where  the  ship  is  registered) and there are other actors in the industry such as private owners and operators of ships which have registered offices in all countries. Hence these sectors were excluded due to the  complexity  of  accounting  and  appropriating  emissions  to  countries.  Nevertheless, due  to  environmental  concerns  on growing  emissions  the  International  Civil  Aviation Organization   (ICAO)   and   the   International   Maritime   Organization   (IMO)   were mandated  to  frame  and  implement  laws  to  control  the  emissions from  these  sectors.

Despite  steps  taken  by  the  organizations,  there  was  an  80  per  cent  increase  in  CO2 emissions from these sectors between 1990 and 2010, as compared to a growth of 40 per cent  from  other  activities across  the  globe.  Further,  according  to  the  third  IMO  GHG study, it is estimated that the GHG emissions from international shipping are projected to grow to 6-14 per cent by 2050, an increase of 50-250 per cent from the business as usual (BAU) scenario due to increase in demand for seaborne transportation.

At the start of the negotiations the draft text of the Paris agreement had an explicit paragraph to control emissions from aviation and international shipping. However, during the course of the negotiations, the optional paragraph was omitted and these sectors are not included in the current climate deal. Therefore the responsibility to control GHG emissions from the shipping sector continues to rest with the IMO and there would be no national effort to regulate emissions from international shipping.

IMO’s Leadership Role

While the nature of activities and the non-homogeneity of the actors was an impediment in  including  international  shipping  in  any  country  based  GHG  accounting  framework, the sector, under the guidance of the IMO was able to successfully negotiate and adopt a model for controlling emissions. Three key agreements have been evolved by the IMO since 2010 under a sectoral framework, and these will continue to be implemented by the  Marine  Environment  Protection  Committee  (MEPC)  in  a  phased  manner.   These are:

• Adoption of NOx Emission Standards for engines
• Reduction in sulfur content of fuel to contain SOx emissions
• Mandatory mechanisms aimed at reducing GHG emissions from ships such as Energy Efficiency Design Index (EEDI) and implementation of Ship Energy Efficiency Management Plan (SEEMP)

Not undermining the efforts of the IMO to regulate emissions from international shipping within the overarching framework supported by UNFCCC, much more still remains to be done. An overall cap on emissions was resisted by the IMO in the run up to the Paris meeting on the plea that it would restrict the profitability of shipping and would compromise on the industry’s ability to meet the growing demand of the world’s economy. However, the IMO expressed its solidarity with the global goal and has vowed to continue efforts to curb emissions from the sector.

An overall CO2 emissions cap for the sector has to be implemented equally across all  countries  for  reductions  of  aggregate  GHG  emissions.  Such  an  initiative  has  to  be global and flag neutral and can be best delivered and implemented under the guidance and  leadership  of  the  IMO.  Considering  that  the  shipping  sector  continues  to  be  ‘a servant of the world economy’ and that there are no overall caps which have been agreed in the Paris climate deal, the IMO is doing a decent job of driving the shipping industry on the path of lower CO2  emission intensity. The sectoral model which is applicable to all countries has triggered the growth of clean shipping and has the potential to reduce emissions of CO2 per tonne-km by 50 per cent by 2050. While an absolute cap may not be  feasible  as  it  is  incident  on  the  quantum of world  trade,  deeper  emission  intensity cuts which are in the range of 80-90 per cent have been suggested by 2050 if a 2 degree centigrade  goal  has  to  be  met.  An  aggressive  approach  to  meet  this  goal would  also require that  emissions  from international  shipping  have to peak  by 2020  and  need  to fall  thereafter  at  a  drastic  pace.  A  CO2  neutral  shipping  industry  by  its  own  would  be expensive  to deliver  and  hence  IMO  must  work  towards  offsetting  these  emissions  by investing  in  carbon  sinks  in  other  sectors.    Alternate  options  and  other  measures  to reduce  emissions  would  be  discussed  in the  forthcoming  69th   session  of  the  MEPC meeting in April 2016.

Conclusion

While the global climate deal can be considered as a diplomatic success, it has left the maritime sector out  of its ambit. This implies that  the international  shipping industry led  by   the  IMO   needs  to demonstrate   continued  leadership  for  evolving  binding agreements and for adopting targets which are consistent with the goal 1.5-2 degree C rise. The IMO is in a position to deliver a win-win arrangement as it can guide the sector to regulate itself while contributing to the global goal of attaining carbon neutrality. It can do this at a pace which is technologically feasible while maximizing profits and contributing to the growth of the world economy.

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About the Author:

Kapil Narula is a Research Fellow, National Maritime Foundation, New Delhi. The views expressed are his own and do not reflect the official policy or position of the NMF, the Indian Navy or the Government of India. He can be reached at kapilnarula@yahoo.com