OxfordManchesterSussexEast AngliaSouthamptonNewcastleCambridgeDirectorsProfessor Kevin Anderson Professor Kate Brown Professor Jim HallProfessor John ShepherdProfessor Robert Watson

Dr. Paul Gilbert With special thanks to Alice Bows and Richard Starkey

p.j.gilbert@manchester.ac.uk

Tyndall Assembly, Southampton

2nd September, 2010

What about plan B?

Overview

• About me

• Role that Tyndall has played when looking at plan B

• A case for looking at plan B with regard to international shipping policy

• Complexity of doing this

• Options to move forward

About me

Tyndall lecturer in climate change, sustainability and project

management within MACE

Mechanical engineer by trade

Control and reduction of international shipping emissions• Allowing nations to take responsibility

• Advising policy

Life cycle assessments of low carbon technologies

Tyndall’s approach to ‘plan B’

Tyndall’s role

As climate change researchers we should not be simply answering policy makers questions

Questioning policy makers policy

In some cases, policy has become more closely aligned to Tyndall’s research• Some examples of this from Tyndall Manchester

UK’s climate change Act

Decarbonising the UK• Looked at endpoint targets and questioned emission pathwaysCumulative emissions• Their importance became recognised in various quartersNGOs started campaigning for climate change Act• Funded various research activity including ‘Living within carbon budget’• Received high-profile media attention• Main message – Urgency for emissions peak dateNow have climate change act, short term budgets and emission pathway

Raising profile of aviation emissions

• Plan A – ICAO to tackle aviation emissions• UK aviation emissions growing at twice the rate of GDP• Plan B – Assessed aviation at a national scale• Revealed incompatibility between UK’s energy and aviation 2003 White

papers• NGO activity in similar area – received high-profile media attention• No longer a side-line issue• Aviation considered important by CCC• UK policy makers supported inclusion of aviation in EU-ETS

A case for looking at plan B with regard to international shipping policy

Reasons for doing so:• Sector that is predicated to grow

• Receives little attention, as it is difficult to mitigate emissions

• Political orthodoxy is very global but no international agreement– Can this global sector only mitigate emissions through global policy?

Shipepedia

Most efficient mode of transport per tonne-km

CO2 emissions from international shipping estimated at 807 Mt in 2007

2.7 % of global CO2 and expected to grow very rapidly

Shipepedia

• 80 % of world trade is shipped, closely linked to economical development• Historically, growth rate matched GDP • Growth in seaborne trade is 4.1 % per annum• Outstripping GDP which grew at 3.4 % over same period

Source: IMO 2009

Shipping and globalisation

There is significant importance for continued growth for shipping

in terms of globalisation

• Delivers the global demand for grain, crude oil and tea!

• And other essential items such as…

Never ending amounts of technology

A large car for the school run

Staple fruit and veg all year round!

Shipping and globalisation

Increasingly seen as fundamental for developing economies

“Whilst grounding all aircraft would have little impact on global

trade, berthing all ships would bring global trade to a standstill” (stakeholder)

Does shipping need to reduce its emissions?

“No, no, no, no, no, no, no!” (Angry stakeholder)

Shipping sector’s view

Little appetite in many parts of the shipping industry for emission reductions• Equating mitigation with job losses • Paying a premium for being environmentally friendly• Loss of market share due to modal shift

Furthermore, given that shipping contributes to a small proportion of global emissions attention paid to shipping was unwarranted • Given the industry’s fuel efficiency • The lack of pressure placed on road transport

Why have shipping emissions been overlooked?

Kyoto Protocol

• Nations do not need to include international shipping and aviation in national inventories and targets

• UNFCCC handed responsibility to IMO to pursue emission reductions

• However in 13 years, failed to act

What makes shipping an interesting area to explore in terms of climate change?

Several reasons including:

• Shipping integral to economic growth

• Uncertainty in emissions data

• Complex system

• Balance of power in terms of negotiations

• Contractual arrangements– Incentivise inefficient behaviour– Vested interests of the actors, no advantage to decarbonise

• Dirty fuel– Heavy fuel oil

International CO2 emissions from shipping

Without an agreed starting point, how steep are emission cuts required to be

Global CO2 estimates vary substantially depending on the type of model used

• On going debate in literature for which is most appropriate

Shipping - Complex system

Global nature of the shipping industry is an extremely challenging barrier to address

Owned by a company in nation A

Owned by another country in nation B

Registered in nation C

Operated by ship management in nation D

Crewed from a manning agency in nation E

Uses nationals from nation F

Source: (UNFCCC 1996)

Not just organisational and institutional

Routes not limited to 2 or 3 nations• Depending on the type of service, they can ‘tramp’ around the seas to pick up

cargo

• Relatively few services will be limited to one or two ports

Source: LMIU

A strange balance of power?

• Whilst the balance of power in terms of negations normally lies with US and Western Europe

• In shipping this lies with the owner and register of ships– Flag of convenience

Territories and countries with largest Controlled fleet Registered vessels

1 Japan Panama2 Greece Liberia3 Germany Marshall Islands4 China Hong Kong, China5 Norway Greece6 Republic of Korea Bahamas7 United States Singapore8 Hong Kong, China Malta9 Denmark China

10 United Kingdom Cyprus(UK 14th)

Source: UNCTAD 2009

Plan A – Current efforts to reduce shipping emissions

Outcome of Copenhagen

“Negotiators have so-far failed to see beyond their own narrow or group

interests… They are currently hemmed in by stale political positions… This is

unfortunate and regrettable.” (Bill Hemmings, Transport and Environment)

Current international progress

IMO notoriously slow

“On average, it is taking seven and a half years for international shipping legislation to enter into force following adoption by a government.” (Richard Mead, Lloyds list)

“If the way the IMO works is the way other UN things work, then the cockroaches will win the day… it’s shocking trying to get people to agree on even the most simple things.” (stakeholder)

To give them some credit…

Put forward its own technical and operational developments to

reduce GHG emissions

And suggested policy instruments in the form of:• Efficiency standards• Proposals for emissions trading

EU perspective

Pressure to act at an EU level

“I say to the IMO: time is running out,” (Connie Hedegaard, European commissioner for climate action)

• No international agreement by December 2011 the EU Commission will act • With the proposed scheme entering into force by 2013

• With international shipping emissions expected to rapidly grow and seaborne trade outstripping GDP

• With the very nature of the sector itself making it difficult tackle emissions

• With the slow response to reduce shipping emissions at a global level

• Is the current global policy approach effective enough alone to avoid dangerous climate change in the short- to medium-term?

Plan B – Can the UK adopt unilateral measures to reduce its share of shipping emissions?

If UK is to consider unilateral action, it first needs to determine:

• What share of shipping emissions it is responsible for

• What areas/actors the UK can influence to mitigate emissions

UK carbon budgets and shipping

By determining UK’s contribution to international shipping emissions

• Compare this with other sectors

• Include international shipping in the UK’s domestic emission budgets– Ensure steeper cuts do not have to be made elsewhere

Unilateral action

From defining the UK’s share and what it can influence:

• Provides a means by which UK can implement policy

• Monitor mitigation efforts over time

Apportionment of emissions

Multiple methods to share out international shipping emissionsBunker fuel sales – reported as memo item to UNFCCC• Under-reporting occurs• Penalises coastal nations selling relatively cheap fuel

UK government expressed concern that it did not reflect the UK’s actual share

UK – 7.7 Mt CO2

Germany – 9.6 Mt CO2

Netherlands – 48.9 Mt CO2

Source: UNFCCC

Again, plan BIs this apportionment method fair?

UK’s responsibility

Assessed and quantified UK’s share under a range of methods• Fairness, data cost and quality, and ease of implementation

If shipping is viewed as a complex system consisting of a number of interdependent actors then

Consumers of shipped goods and producers of these goods are the dominant actors within the system• The exchange of goods is crucial for economic growth• Shipping facilitates the movement of these goods• Therefore most responsible for emissions

UK’s shipping emissions

• Proxy for goods consumed and produced from shipping– As the fairest method is the most data and time intensive method

• Up to six times higher than bunker fuels estimate

Including this in UK carbon budgets• Mean steeper cuts in other sectors

Bunker fuel sales – 7.7 Mt CO2

Goods consumed – 42.1 Mt CO2

Goods produced – 31.4 Mt CO2

What can the UK influence?

Goods consumed and produced• Such behavioural changes are essential to start decarbonising in short- to

medium-term• Lower congestion, incentivise lower-carbon operational behaviour,

incentivise shorter journeys, encourage more local consumption/production

• Push freight onto land-based modes (assuming no accompanying regulation)

Location of emissions• Control release of local pollutants, standard of vessels in waters, lower

congestion at UK ports, incentivise more efficient routing • Reverse modal shift

Type of fuel sold• Incentivise low-carbon fuels• Ships refuel elsewhere

Conclusions

Cumulative shipping emissions increasing faster than GDP

Consumption and production of goods are driving this increase

Shipping facilitates consumption Ipods, family cars, fruit + veg

Need to reduce these shipping emissions in short- to medium-term

Plan A is not working – the IMO has not delivered

Technological measures will not be enough, neither will operational measures

Plan B needed – national action to complement IMO/EU action

Issues IMO has limited influence over but national Gov can play a role

National governments can influence the key drivers

Nations should include shipping in budgets and targets

Apportioning based on consumption increases the UK’s share by 6 times

Unilateral policy should focus on what it can control nationally

Plan A,Because there is no Plan B

Plan B,Because Plan A is not enough

Questions for discussion

• If shipping is the most efficient mode of transport and key for globalisation, does it need to reduce its emissions?

• If so, at what rate?• Is decarbonising the sector compatible with economic growth?

• Does the IMO have enough influence to reduce emissions when the key drivers are consumption and production?

• What are the advantages and disadvantages to include shipping emissions in UK’s national budgets and targets?

• What (if any) other plan B’s spring to mind? Is this one plausible?• How far can emissions trading take us?

Shipping in relation to global emissions

• Many global budgets consider a high probability of not avoiding dangerous climate change – what is the danger behind this?

• Of the small handful of shipping scenarios out there, majority based on SRES scenarios and only one assumes shipping will fall by 2050

• Expected to grow and will take a significant if not all of budget by 2050• If continue to grow then means other sectors will need to make even more

steeper cuts to ensure avoidance of dangerous climate change

Contractual arrangements

• Within the sector, contracts are agreed between two parties only, to protect the economic interests for both parties under various conditions.

• In terms of reducing emissions either technically or operationally, these contracts are often responsible for incentivising inefficient behaviour

• Under a voyage charterparty, ship owner sets the speed• When arrives, it port can handle the ship it unloads and reloads• If not, it is entitled to a compensation, whilst waiting to unload• Often the compensation is higher than the extra fuel cost and then the incentive is for the ship

operator to set sail at high speed to arrive as early as possible • The highest potential savings is expected where economic considerations (incentives from

contractual arrangement) presently favour inefficient operational arrival

Fuel use

• Heavy fuel oil• Provide an adequate global supply of cleaner

distillate (diesel) fuel for the shipping industry is considered by some to be too great a challenge in itself

• Alice do you have anything on the cooling effect of HFO?