Memorandum submitted by WWF-UK
WWF-UK welcomes the opportunity to contribute
to this timely inquiry into an important but little-discussed
source of CO2 emissions. Our responses to the questions are set
out below.
How significant is global shipping's contribution
to climate change? How is this projected to change in the future?
WWF understands that the provisional figure of 1,200
MtCO2 for the global shipping industry is likely to be an overestimate,
and that at the 58th Marine Environment Protection Committee meeting
(MEPC 58, taking place in London from 6-10th October) a central
estimate of approximately 850 MtCO2 will be presented. Nonetheless,
this represents around 4% of anthropogenic CO2. Global shipping
emissions are greater than those of all but the 6 heaviest-emitting
countries—more than the UK and almost equal to Germany.
Shipping emissions have roughly doubled since
1990 and the IMO forecasts continued growth as demand increases,
even allowing for potential gains in efficiency. Furthermore,
the sulphur particles in ship emissions, which exert a cooling
effect in the short term, are likely to diminish substantially
as tough new standards (that have already been agreed) come into
force over the next two decades.
How should the UK's share of international maritime
emissions be measured and included in UK carbon budgets? How fast
could this be done?
WWF-UK advocates a global sectoral approach
to tackling shipping emissions (see further under Q3). In such
a scheme the responsible entity is not the country but the shipowner
(just as airlines, not Member States, will have to surrender allowances
when aviation enters the EU ETS). Contrary to the impression given
by the Government, this does not mean that the UK should
exclude these emissions from its national totals; such an argument
could equally apply to all traded sectors in the ETS from 2013
and our national totals would then cover less than half of our
overall emissions.
Even if a global scheme can be negotiated (which
is far from certain), it would be prudent to include shipping
in the UK's account; to ensure that the national effort to combat
climate change is a comprehensive one.
Unlike for aviation, calculating shipping emissions
from fuel sold in the UK gives a poor picture of the overall level
of activity. On this measure the UK's shipping emissions (reported
as memo items to our National Inventory under the terms of the
Kyoto Protocol) have stayed static since 1990, despite an increase
in shipping activity in and out of the UK.
WWF-UK, therefore, advocates a route-based system
of accounting: emissions of ships on routes that end at a UK port
would count to the UK. This is in line with the principle that
the importer generates the demand for, and bears the cost of,
the associated transport. This approach was judged feasible in
terms of methodology and data availability at a technical workshop
last year,[1]
and is the most attractive option if it proves politically necessary
to differentiate Annex I from non-Annex I emissions for a global
climate change agreement (although please note that WWF sees this
as less preferable than a global agreement).
What are the prospects of international agreements
to control and reduce carbon emissions from global shipping, or
to bring it within wider emissions trading schemes?
Bunker fuel emissions occupy a precarious niche
at UNFCCC negotiations. Aviation is barely discussed, and shipping
has only recently begun to get a hearing, but some Parties wish
to see both sectors left exclusively to ICAO and IMO and therefore
struck off the UNFCCC agenda.
These Parties (OPEC, US and others) point to
Article 2.2 of the Kyoto Protocol, which states that Annex I parties
should "pursue limitation and reduction" of GHGs from
these sectors working through IMO and ICAO. Article 2.2 contains
a paradox that has blocked progress on bunker emissions for the
past decade: IMO and ICAO are charged with tackling Annex I emissions,
but IMO and ICAO do not recognise UNFCCC Annexes or operate on
the UNFCCC principle of Common But Differentiated Responsibilities;
rather they have apparently contradictory principles of treating
all ships (or airlines) the same, regardless of nationality.
Over the last 18 months or so, IMO has suddenly
begun to play a very pro-active role in seeking to limit GHG emissions
from shipping (providing a welcome contrast to the ICAO). Work
is underway on a range of measures: a design index for new ships,
an operational index for existing ships, a menu of best practice
options, but most importantly in WWF's view, and certainly most
controversially, a "market-based instrument", of which
there are two basic variants: a cap-and-trade scheme, or a levy
on emissions / fuel use.
Schemes of this nature have been proposed by
Norway, Denmark and Germany and would apply globally, to emissions
of all ships, regardless of nationality. The revenues raised (potentially
tens of billions of dollars) would be spent on adaptation and
mitigation objectives in developing countries. Proponents of such
schemes argue that it is not possible to divide up shipping emissions
in a way that is not liable to evasion, ie it is not possible
to differentiate between Annex I and non-Annex I parties in the
application of a market-based instrument. They argue, though,
that the benefits of the revenue being spent in developing countries
outweigh the costs to those countries, and that the principle
of Common But Differentiated Responsibilities (CBDR) is thus respected
in the distribution of revenue.
Opponents of a global scheme (chiefly the BRICS
countries—Brazil, India, China and South Africa) do not
accept that CBDR can be honoured in this way. They view a global
scheme as an imposition of Annex-I style targets on non-Annex
I parties (although the proposals are for operator emissions trading,
so liable entity is not the country but the operator of the ship,
just as airlines not Member States will surrender allowances when
aviation enters the EU ETS).
The alternative to a truly global scheme is
one that applies to "Annex I" emissions only, but this
requires a definition of what emissions can be attributed to Annex
I Parties.
It is widely recognised that differentiation
by flag is unfair (77% of ships are flagged in developing countries),
contrary to IMO principles, and easy to evade; a ship can be re-registered
under a new flag in a matter of hours.
A variant would be to differentiate according
to the nationality of the ship owner, as many Panamanian-flagged
ships (for instance) are controlled by companies registered in
Annex I countries. The UN Convention on Trade and Development
(UNCTAD) publishes statistics based on "state of effective
control", and the majority of ships by this definition belong
to Annex I countries. But the problem still applies, if there
were climate policy that imposed a cost only on ships owned by
Annex I countries, there would be an exodus of ship-owning companies
from Annex I to non-Annex I, much in the same way as
some companies currently register in offshore tax havens where
it suits them.
A more interesting possibility is a route-based
approach (see answer to previous question). Emissions on all routes
to Annex I ports would be subject to a cap-and-trade scheme or
levy, regardless of who owned the ships or where they were flagged.
This would impose the cost on consumers (importers) in the developed
countries, as ship owners passed through costs, and it would respect
IMO principles as all ships on a given route would be treated
the same. The question is whether such a policy would lead to
evasion, for instance by ships making an extra port call at a
country on the edge of the Annex I zone (eg a ship from Shanghai
to Rotterdam docks briefly at Casablanca). Research carried out
for WWF by CE Delft suggests that this type of evasion might be
attractive to ship owners at a carbon price of around $30/tCO2;
one of the most frequently quoted illustrative prices for carbon
over the next decade.
Our analysis of the political situation is,
that many individuals within the delegations of BRIC countries
accept privately that any maritime emissions scheme that was less
than global in scope would lead to evasion and distortion. Notwithstanding
that, the principle of CBDR is absolutely critical to their negotiating
strategies in the context of the wider climate negotiations, and
they fear that by granting this concession in the shipping sector
they risk conceding the principle more widely. Given the stance
of the United States, there is some justification for this suspicion.
So for example: India and China have tabled
a proposal to MEPC 58, that differentiation according to nationality
of ship owner should be explored further. This is a delaying tactic;
it is inconceivable that they do not understand that such a policy
would lead rapidly to a re-location of company headquarters to
non-Annex I countries. But while this game is played out, it will
be difficult to reach an international agreement on maritime emissions.
How well is the UK Government playing a role in
developing such agreements?
At IMO, the UK delegation is composed of representatives
of the Maritime and Coastguard Agency (MCA), who have historically
dealt with more technical issues (ballast water, anti-fouling
paint etc) and of DfT. Although the composition of the delegation
is evolving, it is perhaps not evolving as rapidly as the agenda
of the MEPC, and the UK is not among the leading voices in the
debate around Market-Based Instruments. There is no "UK proposal"
that builds on work done by the Norwegians and Danish.
At UNFCCC, where the EU speaks as a bloc through
the Presidency, it is a little harder to pinpoint the exact contribution
of the UK. Again though, our sense is that the UK has played a
disappointingly passive role to date, despite its stated preference
to see maritime emissions included in the next global agreement.
There is a tendency to place "bunkers" in a category
off to one side, rather than exploring the linkages with other
elements of the climate package. To elaborate: one of the exciting
features of the maritime proposal is that it could raise substantial
amounts of revenue (potentially tens of billions of dollars annually)
for adaptation and mitigation work in developing countries. This
should be a very strong selling point when building support for
such a proposal, particularly with those countries most vulnerable
to climate change. But the diplomatic spadework has not been done
(and the wider EU is culpable here too), the concerns of such
countries over (say) the cost of imports have not been addressed
(other than by WWF research) and opportunities have been missed;
for instance in the recent Bangladesh-UK conference on climate
change. Bangladesh has been one of the developing countries most
interested in financing adaptation through a levy on bunkers,
yet the Secretary of State for International Development did not
mention the topic in his address.
Overall, the UK Government must develop a strategy
for achieving its objectives in maritime emissions that is more
pro-active and more co-ordinated across the different Departments
and agencies that share the responsibility.
What are the prospects for developing new engine
technologies and fuels, as well as more fuel-efficient operations?
Unlike the aviation sector, the shipping industry
has a number of unrealised technological options to make substantial
reductions in its emissions intensity, so that increasing the
cost of burning fuel is more likely to drive efficiency within
the sector than to limit demand.
For instance, the new generation of "sky-sails",
essentially huge kites harnessing the wind to power ships, could
reduce fuel burn by 10-15%. Cruising at slower speeds in order
to do "just in time" deliveries of cargo can reduce
fuel burn by up to 40% on some routes (figures from personal correspondence
with IMO).
Several more detailed assessments of the mitigation
options within the sector are available and we do not attempt
to summarise these here. See for instance: http://www.regulations.gov/search/redirect.jsp?objectId=090000648063a431&disposition=attachment&contentType=pdf
What are the effects of shipping on UK air quality
and public health? How well is the Government tackling this, and
what more could it do?
There is significant harm to public health in
UK port towns through emissions of sulphur dioxide, particulate
matter and polycyclic aromatic hydrocarbons from ships that run
their engines while berthed. Ships do this in order to power on-board
electrical systems while they are in port, but with a little investment
in infrastructure this power could be provided by shoreside renewable
generation; and clearly this move would also have a positive impact
on overall shipping GHG emissions. WWF recommends that the Government
legislate to encourage or compel port authorities to include the
provision of shoreside electricity in a standardised port due.
In this way, ship operators would already have paid for the power
and would have no incentive to burn extra fuel to provide their
own. (Incidentally, the same model would work for Port Waste Reception
facilities—ships would have no excuse for dumping waste
at sea if they could dispose of it safely in port at no extra
cost.)
September 2009
1 Technical workshop on GHG emissions from aviation
and maritime transport in Oslo 4-5 October 2007-conclusions by
the organisers. See http://www.eionet.europa.eu/training/bunkerfuelemissions/Conclusions%20of%20workshop.doc Back
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