Shipping Industry Should Do Its Fair Share on Climate Change


International shipping (from cargo ships) is a major and rapidly growing source of carbon pollution. It’s responsible for 3 percent of global emissions—twice that of Australia. Unfortunately, because shipping is an international sector with its pollution not attributed to any country or covered under an international agreement like the Kyoto Protocol, little is being done to address this substantial and growing carbon pollution source.  

WWF and Oxfam released a report this fall (“Out of the Bunker:* Time for a Fair Deal on Shipping Emissions”), outlining how the sector can reduce emissions without hurting its bottom line or unduly penalizing developing countries. The approach would also help tackle a major challenge to generating global action on climate change—raising funds for developing countries to prepare for climate change impacts and curb emissions. Developed countries, like the U.S., pledged such funding but have not adequately mobilized it. At a time when countries are struggling with deficits, an alternative source of revenue is critical.

The chorus is getting louder about how reducing pollution from the shipping industry can play a key role in curbing climate change and preparing vulnerable communities for sea-level rise and increased extreme weather events such as flooding and droughts. For example, Bill Gates, the World Bank and the International Monetary Fund (IMF), recently voiced support to the G20 for raising revenue through shipping.

The WWF/Oxfam proposal offers a path forward for raising revenue through shipping while addressing shipping pollution in a fair and equal way. This would require countries to agree to three core principles. The shipping industry should:

  1. Reduce carbon pollution;
  2. Raise revenue for climate impacts; and
  3. Create no additional costs to developing countries

Revenue raised from shipping emissions will makes sure that developing countries do not face a net cost as a result of a carbon price. Funds will also go toward addressing the impacts of a changing climate in developing countries.
Cutting carbon pollution from ships could actually be implemented at a negative cost because of efficiency measures. WWF and Oxfam estimate that pricing carbon pollution in the shipping sector would increase the cost of global trade by 0.2% ($2 for every $1,000). However, the report shows that the in some instances ships could reduce emissions by 33%, while saving money or breaking even. Just like when you turn off your lights at home, you cut carbon emissions and save money at the same time.

WWF/Oxfam’s proposal also benefits the infrastructure of the shipping industry. Addressing this sector’s emissions can help avoid climate change impacts such as storm surges and sea-level rise that threaten global harbors.

After more than a decade of delayed action from this sector, it’s time for an agreement on reducing shipping emissions that also benefits countries most vulnerable to a changing climate.

*Bunkers refer to shipping emissions, which is the jargon used at the United Nations climate negotiations.

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