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Shipping Industry Bodies Call For Emissions Trading

by Jason Gorringe, Tax-News.com, London

01 October 2009


The shipping industry associations of Australia, Belgium, Norway, Sweden and the UK on September 23 launched a discussion paper detailing a practical solution for reducing CO2 through emissions trading.

“It is important that legislators and regulators find a practical way of including shipping in the international work to reduce global warming,” said UK Chamber of Shipping president Jesper Kjaedegaard.

The report urges that nations discuss an emissions trading system instead of a carbon tax, as applied in other polluting sectors.

“Shipping is, by a considerable margin, the most efficient way to transport goods, but it still produces about 3% of the CO2 emitted as a result of human activity. Clearly such a major industry, transporting over 80% of world trade, has a responsibility to reduce carbon outputs. We believe some form of emissions trading system is the way to do it,” Kjaedegaard said.

“It is important that any solution is global and developed through the UN’s specialist maritime agency, the International Maritime Organization. It is also vital that any emissions trading regime is implemented without driving goods to other modes of transport, which would increase overall emissions and damage commercial shipping,” Kjaedegaard continued.

The report seeks to demonstrate how a global and open emissions trading system for shipping can work in practice. “Although improvements will continue to be gained through ship design and operational efficiency – and any new system must take account of these – 'cap-and-trade' is the only way to guarantee overall CO2 emissions reduction,” the associations argue.

“Using the power of market forces, such a system would put the incentives in the right place to drive standards and behaviours. For example, it would force operators to pay more attention to efficient voyage-planning and management of their fleets, and investment in modern tonnage, as lower emissions would be financially rewarded. It would also promote change by supporting innovation and technological development,“ the associations said.

“Our associations will now work with governments and others – many of which already support the cap-and-trade concept in principle – to persuade them to take account of this approach in the important international negotiations which lie ahead in the UN-led global CO2 reduction talks in Copenhagen in December and subsequently in the International Maritime Organization.”

The discussions are part of a global effort to significantly reduce carbon emissions. The countries and international organizations are negotiating a new, more ambitious, agreement on climate change to replace the Kyoto protocol, agreed in 1997, which did not feature the aviation and shipping sectors. It is thought that within the agreement the aviation sector will be required to cut its emissions by 10% below 2005 levels by 2020, while shipping will be required to cut its emissions by 20% below 2005 levels over the same period.


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