Rough Seas for Shipping Industry Emissions Agreement

Depending on how it’s spun, recent shipping industry meetings on controlling greenhouse gas emissions through market-based trading schemes either made “steady progress” or no progress at all.

The International Maritime Organization characterized the meetings of the third inter-sessional meeting of the Working Group on Greenhouse Gas Emissions that ended early this month in London as making steady progress. The meeting was attended by more than 200 experts. A major topic centered on the “compelling need and purpose” of developing market-based measures (MBMs) as potential mechanisms to reduce GHG emissions from international shipping.

The Working Group was also tasked with evaluating a feasibility study and impact assessment by an Expert Group of several possible measures proposed by governments and observer organizations. The Expert Group study also assessed the impact of proposed MBMs on, among others, international trade, the maritime sector of developing countries least developed countries (LDCs) and Small Island Developing States (SIDS), as well as corresponding environmental benefits.

Following the completion of that study, IMO said some of the proposed MBMs “have been combined or further developed by their respective proponents.” In addition the meetings this month featured an “extensive exchange of views” on the desirability of MBMs in relation to what they might provide: certainty in emission reductions or carbon price; revenues for mitigation, adaptation and capacity building activities in developing countries; and incentives for technological and operational improvements in shipping.

The upshot is that all of these views and advice will be pushed along the bureaucratic pipeline to determine next steps, including “further in-depth examination of the impact of MBMs on developing countries.”

MBM proposals on the table range from a contribution or levy on all CO2 emissions from international shipping or only from those ships not meeting the requirements of the Energy Efficiency Design Index (EEDI) via emission trading systems, to schemes based on a ship’s actual efficiency, both by design and operation, based on the Ship Energy Efficiency Management Plan.

The EEDI and SEEMP are technical and operational measures aimed at reduction of GHG emissions from ships. They have been circulated for voluntary use by IMO and for further discussions on making them mandatory under the MARPOL international shipping convention.

Lost in the shuffle of the alphabet soup diplomatic discussion is an apparent split between developed countries that are calling for various options—including emissions trading schemes, global levies or fuel efficiency  trading credits—and developing nations that contend they should  have less responsibility for cutting emissions.

Steady progress or impasse? It seems unlikely that a set of concrete MBMs that nations agree upon is possible by the time the Working Group must report its conclusions in July. Meanwhile the European Union is threatening to take action on its own to curb shipping emissions if the impasse continues until the end of 2011. Environmental groups such as Seas At Risk, Transport & Environment and the Environmental Defence Fund are pressuring the EU to get on with it.

If there is progress at the IMO, it’s microscopic.