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20th of April 2018

Economy



The shipping industry attempts to cap carbon emissions

ACROSS the river from the International Maritime Organisation (IMO) headquarters in London protesters have pressure-hosed “IMO DON’T SINK PARIS” into the muck lining the walls of the Thames. The river bank is not the only thing that is dirty.

Shipping and airlines were the only greenhouse-gas-emitting industries not mentioned in the 2016 Paris climate agreement. This was, in part, because assigning emissions is hard. To whom should you designate emissions for shipping Chinese goods, made with South Korean components, across the Pacific to American consumers? But similar problems did not stop airlines quickly agreeing on an industry-wide limit. This week delegates to the IMO, a United Nations agency responsible for shipping safety and pollution, met in a belated attempt to catch up. A deal was due as The Economist went to press.

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It may not be an impressive one. A preliminary agreement set out to achieve cuts of 50% on 2008 emission levels by 2050. Ambitious nations, like those in Europe, think the industry should be carbon-free by then. Shipping produces 3% of the world’s greenhouse-gas emissions, similar to an economy the size of Germany’s, and that is likely to grow.

Lack of cleaner shipping technology is not a constraint. New design standards are already lowering harmful emissions. Zero-carbon fuels are becoming available. Slowing ships down by 10% could reduce fuel usage by almost a third.

Diplomats argue that the slow progress is because their actions affect not just the shipping industry, but exporters too. If regulators move too aggressively they may reduce the competitiveness of seaborne trade. For instance, Brazil, a big exporter of iron ore to China, fears overzealous caps could drive shipping costs higher, helping its competitor, Australia, whose ores travel a quarter as far as Brazil’s. The idea of slowing vessels down draws ire from countries that export perishable goods, like cherries and grapes, as Chile does.

Others argue that powerful lobbyists have hijacked the process. A report by InfluenceMap, a research firm, found that at a recent IMO meeting 31% of nations were represented, in part, by direct business interests. Thomas O’Neill, one of the firm’s researchers, is irked by the power of business at the IMO. “In Paris we did not have coal companies telling us what was possible.”

Countries with large shipping registers can have starkly different interests. The Marshall Islands, a low-lying nation keen to allay climate change that is also home to the world’s second-largest shipping registry, leads the call for drastic cuts. Its president co-authored a vociferous op-ed in the New York Times last week calling for swift action. But Panama, which has the biggest shipping registry, is an opponent. Japanese firms sail many ships under its flag. InfluenceMap says it may be the biggest obstacle to ambitious emissions curbs. Slow sailing indeed.

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