Market News

 September 28, 2009
UN Calls for Emissions Cuts in International Shipping

 No one is immune to the impact of climate change, the head of the United Nations maritime agency warned last week in a message urging world leaders to reach agreement at an international conference aimed at firming up an effective greenhouse gas reduction pact in December.

"Mankind is on the horns of a dilemma," stressed Efthimios Mitropoulos, Secretary-General of the International Maritime Organization (IMO).

In a message marking World Maritime Day, the theme of which this year is "Climate Change: a challenge for IMO too!," Mr. Mitropoulos said that whether "we like it or not, our collective way of life has become unsustainable and we need to do something about it, and soon.

"The choices we have made about the way we lead our lives have been slowly eating away at the very support system that enables us to live and breathe," said Mr. Mitropoulos. "This cannot, and should not, go on."

His message came on the same day that the Britain’s Chamber of Shipping, backed by the national shipping associations of Australia, Belgium, Norway and Sweden, released a discussion paper calling for the global shipping industry to be included into a carbon trading net.

The discussion paper "A Global Cap and Trade System to Reduce Carbon Emissions from International Shipping" was released in part to offset mounting pressure by IMO to decide on a mechanism to curb carbon emissions from shipping.

The European Commission also has threatened to fold shipping into its European Trading System (ETS) if the IMO fails to come to a decision. The IMO has yet to decide whether it should opt for a cap-and-trade system, in which shipowners trade permits to emit carbon dioxide, or a levy or a tax.

The shipping industry has no choice but to address its carbon emissions, said Jan Kopernicki, vice-president of the UK chamber, in an interview with the London Times.

Shipping accounts for 3 per cent of the global carbon emissions from human activity, and the cost of reducing emissions would have to be passed on to customers, which could prove troublesome to the shipping market already in distress due to the collapse in world trade.

The five shipping groups behind the proposal have declined to propose specific targets or timetables and have admitted it likely would be hard to gain consensus from other countries.

"We believe some form of emissions trading system is the way to reduce carbon outputs. But it is vital that any emissions trading regime be implemented without driving goods to other modes of transport, which would increase overall emissions and damage commercial shipping," said Kjaedegaard.

The Guardian