Tuesday, December 6, 2011

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Will shipping industry pay $25 per carbon ton?

In order to raise up to $100 billion by 2020 to aid developing nations in the adaption of climate change and emissions reduction, the United Nations has reportedly been presented with a draft document at the current climate treaty talks in Durban, South Africa that includes a proposal that such funds could, in part, be sourced from an extra “carbon” fee on bunker fuel.

The draft document was floated at the UN’s climate change summit amid the news that global industrial carbon dioxide emissions rose approximately 3 percent this year despite a weakened global economy.

A joint statement was released by the International Chamber of Shipping, Oxfam and the World Wildlife Fund, calling on delegates to the Climate Change Conference: “to give the International Maritime Organization (IMO) clear guidance on continuing its work on reducing shipping emissions through the development of market based measures.”

Oxfam and the WWF have said a $25 per ton carbon fee on bunker fuel could aid in the effort by industrialized nations to raise the $100 billion by 2020 with $25 billion of that goal coming from the shipping industry.

“Putting a charge on carbon in the global shipping sector can have huge benefits in meeting our climate change objectives," said Tim Gore, Oxfam’s climate change policy advisor.

“With around 3 percent of the world's total emissions, full participation of the shipping sector will help greatly towards keeping global warming below the 2°C target agreed by governments,” he said.

The Secretary General of the International Chamber of Shipping, Peter Hinchliffe, praised his environmental cohorts’ willingness to work through the IMO on a market-based approach.

"The shipping industry welcomes the recognition by these important actors from the environment and development fields that it is in the best interests of both the environment and developing nations for shipping to be regulated via our industry regulator, the International Maritime Organization, with the same rules for carbon reduction applying to all internationally trading ships, but in a manner which respects the principles of the UN climate convention," he said.

The three organizations admitted “there are some differences over the detail of such an approach,” but jointly urged the governments meeting in Durban to offer guidance and “assist the speedy completion of the IMO's work” and not to focus on “technical details for shipping.”

"If governments decide that shipping should contribute to the UNFCCC 'Green Climate Fund', the industry can probably support this in principle as long as the details are agreed at the IMO, with the industry's clear preference for a Market Based Mechanism being a compensation fund linked to the fuel consumption of ships, rather than an emissions trading scheme," said Hinchliffe.

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