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Grouping of national shipping associations declares support for emissions trading

Grouping of national shipping associations declares support for emissions trading

London: The shipping industry associations of Australia, Belgium, Norway, Sweden and the UK have today launched a discussion paper detailing a practical solution for reducing CO2 through emissions trading.

"It is important that legislators and regulators find a practical way of including shipping in the international work to reduce global warming," said UK Chamber of Shipping president Jesper Kjaedegaard. "In the debates so far, no option has been defined whereby shipping could fit in with the emissions trading arrangements that are set to be applied to all other sectors. This discussion paper seeks to correct that omission."

"Shipping is, by a considerable margin, the most efficient way to transport goods, but it still produces about three per cent of the CO2 emitted as a result of human activity. Clearly such a major industry, transporting over 80% of world trade, has a responsibility to reduce carbon outputs. We believe some form of emissions trading system is the way to do it."

"It is important," Kjaedegaard continued, "that any solution is global and developed through the UN's specialist maritime agency, the International Maritime Organization. It is also vital that any emissions trading regime is implemented without driving goods to other modes of transport, which would increase overall emissions and damage commercial shipping."
This new paper demonstrates how a global and open emissions trading system for shipping can work in practice. Although improvements will continue to be gained through ship design and operational efficiency - and any new system must take account of these - "cap-and-trade" is the only way to guarantee overall CO2 emissions reduction, it says. Using the power of market forces, such a system would put the incentives in the right place to drive standards and behaviours. For example, it would force operators to pay more attention to efficient voyage-planning and management of their fleets, and investment in modern tonnage, as lower emissions would be financially rewarded. It would also promote change by supporting innovation and technological development. 
The shipping associations say they will now work with governments and others - many of which already support the cap-and-trade concept in principle - to persuade them to take account of this approach in the important international negotiations which lie ahead in the UN-led global CO2 reduction talks in Copenhagen in December and subsequently in the International Maritime Organization.

However, the other main type of market based instrument for incentivizing lower emissions, a so-called bunker levy, continues to find favour with many IMO member states, particularly developing countries. It remains to be seen if the shipping industry can reach agreement on a single scheme ahead of Copenhagen - or risk being timed out and having a solution imposed on it from outside.  [23/09/09]