Copenhagen Conundrum 4: Aviation And International Shipping

Posted on 15. Dec, 2009 by Ross in Asia, Government Policy, Middle East, Transport, Warehousing, Distribution & Logistics

One part of the Copenhagen conference trying to quietly slip under the radar is the inclusion on shipping and aviation emissions into national carbon reduction targets.

Few people remain ignorant of the environmental cost of flying: worldwide aviation emissions have risen by 50% since 1990 on the back of cut-price aeroplane operators and rising affluence. (Having said that, in some circumstances flying is greener than driving!)

What is less well known is that over the same period, international shipping emissions have risen a massive 85%! The worldwide economic boom of course was a contributing factor, but there has been little improvement in the energy efficiency of freight ships, unlike their airbourne counterparts which have a track record of constant improvement spanning decades.

The growth in emissions in both areas, known collectively as bunker emissions, would put the likelihood of avoiding significant climate change remote if both aviation and shipping fail to be included in the Copenhagen agreement. However, as usual countries with vested interests are threatening to derail progress in this area.

China, India, Saudi Arabia and the Bahamas are the four countries forming the roadblock against progress in Copenhagen’s ‘Bunkers Drafting Group’. They are collectively insisting that only developed countries should be involved in bunker reduction schemes. Whilst this would have less impact on aviation at first, this would be all but meaningless for shipping due to the practice of registering ships under ‘flags of convenience’, already widespread for a variety of tax and legal reasons.

Failure to agree in this area would deprive the developing world of huge amounts of climate funding. Both areas are expected to be regulated by a global cap-and-trade scheme which would generate around $25-27 billion per year, all of which would go towards helping developing countries fight against climate change as well as deal with it’s consequences.

That, however, is the last consideration of those blocking the ‘Bunkers Drafting Group, who are set to lose out under the expected schemes. China and India would expect the extra financial burden imposed on both aviation and shipping freight to be passed onto their exports, denting their competitiveness.

Saudi Arabia are blocking the proposals since both aviation and shipping look set to be the main guzzlers of conventional fuels for the near future: as countries try to wean themselves off oil using electric cars and fuel cells, freight transport is likely to be the last area of attention without carbon controls on the bunker sector.

The Bahamas finds itself in unusual company in their action against the Bunkers Drafting Group, given that most island nations are queueing up at Copenhagen to fight climate change in every way. However, the Bahamas generates large revenues from being a ‘port of convenience’, and it’s dependence upon those monies routinely places it in the camp of climate skeptics. Restricting the cap-and-trade scheme to developed countries only would further increase the benefits of registering ships under a flag of convenience, possibly augmenting the Bahamas’ income.

Commenting on the deadlock, John Maggs of Seas at Risk said:

Without a global deal in Copenhagen, regional schemes are likely to pop up around the world. The EU has said many times that without a global deal, it will include shipping in its emissions trading scheme; it has already agreed to add aviation. International bunker fuels would also be covered under the emissions trading bill currently before the US congress. But money from such schemes will not be channelled to the developing world. Failure to reach a deal at Copenhagen would be a massive missed opportunity for the poorest countries.

Image of shipping containers by photohome_uk @ Flickr