It’s not quite back to square one on emissions regulation in the shipping and aviation sectors after Copenhagen but the industries are left with no certainty over how they will be affected in coming years. Perhaps they is even less than they had before. The prime outcome of the UN climate talks was the Copenhagen Accord, a thinly-detailed agreement by a small group of major emitters which makes no mention of the shipping and aviation sectors. This reflects the lack of progress in specific talks on the bunker fuels sectors in the conference itself.

The working group charged with drafting an agreement on bunker fuels, co-chaired by Norway and Singapore, could not agree a draft text to forward to the main body, the Council of the Parties (COP) to the UN climate convention, for consideration. Given the lack of progress elsewhere in the talks, especially on the overriding questions, this allowed sectoral issues like this to slip fairly quietly into the too-hard basket.
 
That leaves the big questions no further advanced towards answers than when the conference began:
  • No targets for emissions reductions for shipping and aviation.
  • No direction on whether a tax or an emissions trading scheme should form the basis of market-based emissions control.
  • No clarity on whether the UNFCCC would leave responsibility for implementing any emissions agreement that might emerge in the future to the peak industry bodies, the IMO and ICAO.
  • No resolution for reconciling the Kyoto Protocol principle of differentiating climate responsibilities according to parties’ economic capacity with the IMO’s primary principle that all ships and nations should be treated the same.
In one sense, there is even more uncertainty given the nature of the conference outcome, says Dr Anne-Marie Warris, a close observer of the talks for Lloyd’s Register. The political landscape has changed, Dr Warris says, and is now additionally complicated by the Copenhagen Accord, which was struck by the US and China essentially, along with a small group of major emitters. Along with aviation and all the wider questions remaining over when and how the world will move forward on climate action, there is new confusion on where the big decisions on shipping are going to be taken. The ideal “is to continue to have a functioning UN framework for negotiations, whether at the UNFCCC or the IMO,” Dr Warris said.

But the possibility that unilateral action will be taken by Europe and perhaps the US has now firmed. The EU has already said that it will move to regulate emissions in aviation and shipping if no global agreement is forthcoming. On targets, it proposes that shipping cut its emissions 20 per cent below 2005 levels by 2020 and airlines cut by 10 per cent over the same period.

Europe already has a plan to include aviation in the EU ETS from 2012 - covering all flights in and out of EU airports. It hasn’t said what it would do with shipping but the European Commission has an options paper up its sleeve drawn up before the Copenhagen conference. There remains broadly two options on the table for market-based approaches to regulating shipping emissions - a tax directly on bunker fuel, or a price on the greenhouse emissions ships produce from it.

An EU directive is probably the next step to watch out for says Bill Hemmings, aviation and shipping policy officer at Transport and Environment, a European non-government organisation. The EU is more likely to go down an emissions trading path. Already the UK, Belgium, Norway and Sweden, along with Australia, have put out a discussion paper detailing a model for reducing CO2 through emissions trading.

Developing cap and trade legislation in the US Senate is also to be watched in early 2010. While the House Waxman-Markey bill did not finally include measures for shipping and aviation, the Kerry-Boxer bill covers bunker fuels in a wider carbon tax regime on fuels upstream at the refinery level, Hemmings said. This may tip the scales in favour of a levy-based approach to bunker fuels rather than emissions trading. If a major bloc like the US goes down one path, it would be hard for anyone else to take a different tack.

At the UNFCCC level, it may be some time before there are further developments.
The COP did renew the mandates of the working groups on the Kyoto Protocol and on long-term cooperative action (LCA), where shipping and aviation was being dealt with. But it’s not yet clear what now happens with the draft text on shipping aviation.

There is a further round of climate negotiations scheduled for Bonn in May. But given how intractable negotiations were on these sectors at Copenhagen there is little guarantee of early progress. We may be waiting until the end of 2010 or beyond for progress now, Warris said.

So was Copenhagen of any value to these industries in sorting out their future? Hemmings says ‘yes’ – the conference and its lead-up in 2009 saw them rise in the debate over climate action with UN working groups on them directly for the first time. “I don’t think Copenhagen was a waste of time, shipping and aviation got a profile they never had before,” he said.

The IMO’s Marine Environment Protection Committee next meets in March to review it’s work plan on shipping emissions. So far, the work plan trials efficiency and technology measures to cut emissions and puts off a decision on market-based instruments for two years or more. The question is whether enough heat has now been generated for IMO members to agree to take more decisive action - to act on market measures ahead of the UNFCCC and before the EU or US do. “Whether there will be any increased possibility of action in IMO and ICAO remains to be seen. That’s the million-dollar question,” Hemmings said.

Ian Hamilton
Carbon Positive

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