Shipping Emissions Could Cost $20 Billion

An ineffective approach to tackling maritime greenhouse gas (ghg) emissions could leave shippers footing a bill of up to $20 billion a year, according to organizers of the first Annual General Meeting of the Global Shippers’ Forum, held under the auspices of the National Industrial Transformation League. More than 50 delegates with shippers’ organizations from North and South America, Australasia, Asia, Europe and Africa attended the meeting.

At a press conference the pan-global trade organization for shippers unveiled its first annual report, setting out its policy agenda. Helping shippers avoid that $20 billion cost is one of its top priorities. In its ‘Maritime emissions briefing note,’ Chris Welsh, secretary general of GSF, said that despite being a comparatively carbon efficient way of moving goods, the emissions contribution from maritime shipping is set to increase threefold by 2050 if left unchecked.

“We have to be really careful that we tackle this challenge firstly in a way that works to limit emissions and secondly in a way which doesn’t hinder world trade at a time when economies around the world are feeling the pressure,” he said. “One such proposal, effectively an international ghg compensation fund, could potentially increase global freight rates by five per cent and effectively land industry with an annual bill which would be enough to pay off a quarter of Greece’s debt.”

Other proposals include a cap and trade scheme (favored by the U.K., Norway, France and Germany), a hybrid scheme based on the International Maritime Organization’s Energy Efficiency Design Index, a rebate mechanism and a port-based scheme.

“The array of proposals on the table all have their strengths and weaknesses, but the significance of getting this wrong means that governments and industry have to be 100 per cent clear of the implications of each proposal,” Welsh concluded. We also need an approach that will encourage industry to use technical and operational efficiency measures to make reductions rather than simply opting for a financial mechanism, such as a carbon tax.”

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