Breaking the deadlock on shipping emissions

International shipping is responsible for an estimated 3 percent of global greenhouse gas emissions, equivalent to those of Germany, thirteen times those of New Zealand. On current trends they are expected to increase by 150-250 percent by 2050. They are as yet unregulated, trapped for over a decade in a familiar impasse where developed countries argue that all ships must be covered by the same regulation, the norm in the International Marine Organisation, but most developing countries insist that any regulation respects the principle that developed countries must lead the fight against climate change, known in the UN Framework Convention on Climate Change as ‘common but differentiated responsibilities’.

WWF and Oxfam have issued a briefing which explores how a proposed deal can overcome the impasse, drive emissions down and deliver much needed funds to the Green Climate Fund established at Cancun to assist developing countries in climate change mitigation and adaptation projects. The proposal they support is for a fuel levy or auction of emissions allowances. At $25 per tonne of carbon dioxide this could raise around $25bn per year, of which at least $10bn should be directed to the Green Climate Fund. Continue reading “Breaking the deadlock on shipping emissions”

In the bunker: entrepreneurs wage war on carbon

If you want cheering up, a visit to the Carbon War Room web site may do the trick. Not everything has to wait on government action. Richard Branson is one of the founders of the organisation. “Harnessing the power of entrepreneurs to implement market-driven solutions to climate change”is how it describes its work.

Branson explains:

“Why is an entrepreneurial approach needed? Entrepreneurs play a unique role in tackling environmental problems head on because we spot possibilities where others only see obstacles. We convened the Carbon War Room to deliver sustainable market models to increase the effectiveness of climate change efforts underway.”

Businesses active in the sustainable energy world are represented on the Board. The CEO is Jigar Shah (pictured), the founder of SunEdison, a large solar energy company which now has more solar energy systems and megawatts under management than any other company. Among his credentials is the fact that he sits on the boards of the Prometheus Institute and Greenpeace USA.

Seven theatres of war are identified – electricity, transport, the built environment, industry, land use, emerging economies, carbon management. There are battles to be fought in each theatre. Several are under way, but for this post I’ll concentrate on Operation Rock the Boat, focused on shipping in the transport theatre.

The shipping fleet, which carries over 85% of all cargo worldwide, emits more than one billion tons of CO2e, making it the world’s sixth largest emitter when compared to countries.  It doesn’t need to produce this level of emissions: existing technology presents an opportunity for up to 75% efficiency gains, with many required investments repaid in less than three years. Improvements can be focused on relatively few vessels to make a difference, since only 15% of the fleet accounts for 50% of emissions.

Carbon War Room (CWR) has identified two key leverage points. The first is that there is at present no ubiquitous standard by which a ship’s environmental impact can be understood.  A platform for accountability is needed.  Second, there is a principal agent problem, analogous to the landlord who lacks incentive to retrofit if the tenant pays the energy bill. The companies that build and retrofit ships do not receive sufficient economic benefit from environmental impact improvements – the consequent savings go to the clients.

CWR’s objective is to play a key support role in putting the shipping industry on the pathway to inevitable transformation within five years. This will in part be triggered by mandatory efficiency labeling in place by 2011 in some regions. A transformed fleet could cut emissions by over half a billion tons annually by 2020, on a path for reductions of over one billion tons by 2050. The transformation will self-finance because of decreased operating expenses.

Here’s the strategy:

“We are building a strong coalition of shippers and their clients, port authorities, financiers, technology providers, NGOs, and industry experts.”

There are five critical components in their approach.

  1. A rating system to create a benchmark efficiency that influences key stakeholder decisions.
  2. Early adopters. Using leaders to send a clear signal to industry that innovative businesses will embrace the new standards.
  3. Unlocking legal barriers. Charter party agreements and shipyard contracts are dated and do not reflect the lifespan efficiency economics of a vessel.
  4. Policy innovation.  Accelerate adoption and enforcement of new regulations on shipping efficiency reporting.
  5. Science. Improve understanding of the link between black carbon from shipping and Arctic ice cap melt and support research of alternative technologies.

I was impressed by the operational planning. All success to them in their coalition building

In this short Youtube clip Jigar Shah, after talking about Earth Day, explains more of the thinking behind the Carbon War Room. I particularly appreciated his affirmation that a low-carbon future is not inimical to our economies. I’ve transcribed a few sentences:

“There are many people who still believe that the solutions that we’re pursuing through entrepreneurs are going to hurt our economic growth. And I think that’s simply not true. I think with the innovation we’ve seen over the past ten years and before, that we actually have the technologies today to switch to a low-carbon future while still pursuing all of the economic growth that we expect and deserve [need?] to bring the billions of people round the world out of poverty”.