Tackling shipping's climate impacts costs less than you think

How much would you be willing to pay to tackle climate change?

How about 0.08 cents more for a banana, 0.19 cents for an iPad or - wait for it - 0.07 cents for a kilo of grain?

These figures represent the price of dealing with greenhouse gas emissions from shipping if a carbon price on shipping of 36 a tonne of CO2 was passed on to final consumers, and Im sure youll agree, theyre not bank-breakers.

Whats more, thats at the high end of projections, given current EU carbon prices are hovering around the 5 mark.

Yet many in the shipping industry disagree, and are lobbying fiercely behind the scenes to crush a European proposal to have the maritime sector pay for its carbon footprint.

The plan - which won support from the European Parliament earlier this year - would see ships pay for their carbon emissions released during their final journey into and out of EU waters.

It means a vessel from Shanghai that picks up more cars or TVs en route to Rotterdam would only pay per tonne of CO2 for the journey from - lets say - Singapore, if thats where it stops last before sailing to Rotterdam.

Yet, most importantly, this proposal would only come into force from 2023 if the UNs International Maritime Organisation (IMO) fails to deliver a global shipping deal by then, as it promised to do in 2016.

If, however, any such agreement is not reached, the sector should be included under the EU ETS and a fund should be established for ship operators' contributions and collective compliance relating to CO2 emissions already covered by the EU MRV system (emissions released in Union ports and during voyages to and from such ports) - text from European Parliament proposal , 13 January 2017.

So to be clear, this is not a unilateral move to undermine the IMO, rather an offer to support the organisation as it tries to corral over 170 states into accepting a global climate deal.

Its a move to try and help ensure the IMO finally takes action on shippings 3% of global greenhouse gas emissions. If left unregulated maritime emissions could spiral 50-250% by mid-century, according to the UN.

Yet the increasingly vocal opposition of the IMO secretary general Kitack Lim to this EU proposal is starting to raise questions among keen observers of the sector.

In an unusual display of proactive diplomacy, Mr Lim has written to Brussels, travelled to Brussels and Malta to lobby ministers and the EU Commission raising it seems more than simply general concerns about the EUs stance.

This raises a number of questions.

What is the IMOs concern about the EUs plan B? Is it a sign that the organization thinks 2023 is too early for a deal? Does it suggest a worry that any final pact will be too weak to satisfy the global community? Is industry exercising its muscle here. Is climate no longer a priority?

European shipowners are up in arms, warning that ambition from Europe would threaten progress at the global level. This is rather an odd argument to make 20 years after the UN first called for action on maritime CO2 pollution.

And particularly odd given that first mover initiatives have invariably been the catalyst for global action on shipping. Climate change is no different.

Ship owners well understand this. Which is why their protestations would seem to belie real intentions delay - and should be dismissed as as special pleading.

Other parts of the shipping industry, ports, operators, and shippers have applauded the Parliaments move because they fear that noisy shipowners are out of step so soon after the Paris Agreement on climate change.

Since it is an insurance policy, one could also analyse the scenario where the European Parliament proposal is enforced in view of failure from the IMO.

Fears that tougher climate laws in Europe could scare off industry are not new, of course, with some arguing they could result in steel and manufacturing firms moving to China and India.

Others say ships would avoid an EU zone of regulation, choosing to berth in Turkey or North Africa, and ship on their goods from cheaper ports.

Lets just explore those arguments for one moment.

Europe is the worlds largest single market: are companies and countries willing to commit economic suicide and cease trading because of a 0.08 cents rise in banana costs?

Even if a ship unloads its goods in Turkey, it will still need to get them to its final destination.

Road haulage also costs money and has limited capacity. Unload all the containers onto trucks from one of Maersks giant EEE ships and they would stretch for 150 kilometres lined up one by one.

These are desperate arguments from a group of shipowners who claim to represent the whole sector yet speak more in isolation and seem intent on ignoring the impending dangers of climate change and the damage it could inflict on Europe.

Climate change is about risk, insurance. To coin a phrase from Mark Carney, the Bank of England governor, warming temperatures are a tragedy of the horizon.

How curious then that a sector that boasts of its hi-tech navigational aids and safety procedures seems happy to cast anchor without having charted a course yet determinedly dismissing a proven plan B.

To steal another phrase from Carney: low probability risks can become large and unforeseen costs. Perhaps its time the UNs shipping body took this advice?

Faig Abbasov is an Aviation and Shipping Officer at Transport & Environment