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Carbon payments should be made by ship owners when unloading cargo in developed countries. That’s one man’s plan to bring shipping into the battle against climate change. Ben Hargreaves explains

Under a Liberian flag, the Swiss-owned container ship leaves Saudi Arabia with a cargo destined for New York. The example begs a question: if we are to include shipping in plans to avert and mitigate climate change, how do we account for this vessel’s emissions, do they come under the climate change regime, and which country is responsible for them?

Goods idea: IMERS sets climate charges for ships based on imports

Landlocked Switzerland? The poor nation of Liberia? Oil-rich Saudi Arabia? What about the fact that the ship sails through international waters on both the outward and return journey, where no country has pre-eminence?

It is questions such as these that have been exercising the mind of Dr Andre Stochniol, a Polish engineer and management consultant who has held distinguished fellowships at Imperial College London, and has worked in the past with Rolls-Royce on the efficiency of its Trent series of aeroengines. Now Stochniol is hoping that a plan he has developed, the International Maritime Emission Reduction Scheme (IMERS), could provide some of the answers to the problem of how to reduce emissions from shipping, some acknowledgement of which is expected to be included in this week’s Pre-Budget Report.

Stochniol – who gave evidence on his proposal to MPs on the influential Environmental Audit Committee last month – is hopeful that, although it’s too early to say exactly how shipping emissions might be targeted by government, they will at least be fully included in the report.

“We may not specify how to control them, but basically we have to count them,” he says. “International emissions should be in and not out, and then we will worry about whether we can reduce them as part of an international scheme or whatever.
“If we want to take leadership and show the world that we are addressing the complex problem of lowering emissions from shipping, they have to be in.”

“Complex problem,” it seems, is right: because how do you determine which emissions, by which ships, should be penalised in the global industry? It’s not as if you’re dealing with a power station in Essex, a steel mill in Wales, or the new models of European carmakers, where the EU can – albeit to much rancour – assign tailpipe carbon dioxide targets.

“The key problem is one of measurement,” says Stochniol. “And too many people are constrained by the old thinking.” An example of this, he says, occurs in thinking of ships in terms of the flags under which they sail. Stochniol points out that 80% of ships plying their trade globally are registered in developing countries, which are exempt from climate change targets.

“If we want to allocate emissions to these countries, it is not going to work; they are outside the climate change regime.”

But if we decide to deal with emissions from ships sailing under the flags of the developed world, we are not tackling the problem either, Stochniol says. “If we deal with just the UK and others, we are only looking at 20% of emissions.”

Reporting emissions based on shipping fuel purchased in the UK, as happens currently, does not help much either, he suggests. “Very few ships buy fuel in the UK – they buy it in Rotterdam because it is cheaper, or in Singapore, or elsewhere.”

Stochniol estimates that reporting shipping emissions in the UK based on fuel sold has meant emissions are under-reported in the country by a factor of six.

“You have to forget about dividing the emissions by country. You have to look at the emissions in totality. From a legal standpoint, most of the emissions are taking place on the high seas, where there is no national jurisdiction regarding the emissions. That discussion has been going on for 20 years. How the hell do you allocate emissions to the UK?”

Originally Stochniol proposed that to get around the problem of greenhouse gas allocation emissions would not be allocated to countries. Instead, all ships would pay for their emissions irrespective of the flag they carry, with the revenue generated going mostly to developing nations.

But this did not sit well with developing countries, who argued that it went against the principle of the UN Framework Convention on Climate Change, in which developing countries are not subject to the same responsibilities as the developed world (see box).

“In private discussions negotiators from China and India said: ‘over my dead body, forget about it’,” Stochniol says. “Even if they got $10 back for every $1 they put in, it went against principle. They said, ‘it’s not a matter of money, it’s a matter of principle’.”

But Stochniol thinks he has finally come up with a viable way of getting around these problems of ownership of both ships and the sea. Under his IMERS plan, ships would be charged for making emissions that exceed a predetermined cap based not on which country they were from, or how much fuel they had used, but where they had unloaded their cargo. The emissions charges would be paid by the ship charterers or owners, but ultimately by the importers of goods.

“If a ship is flying a UK or Panama flag it should be treated the same. I came to the realisation that there is one simple measure that can be used that cuts across boundaries, which is where the goods on the ship are unloaded. Basically the emissions result from a demand for the import of, say, cars. And when I looked at the data, it became obvious that developed countries are responsible for importing 60% of goods worldwide,” says Stochniol.

Working on this basis allows a “common but differentiated” scheme on shipping emissions to be developed, in which the onus is on ships travelling and delivering goods to developed world destinations to account for their greenhouse gases and pay charges for exceeding a to-be-decided emissions cap.

Delivery of goods to developing nations outside the UN’s Annex-1 list of developed countries (see box) is excluded from IMERS. “Worldwide, the Annex-1 share of unloaded goods is 60%,” says Stochniol. “Therefore, on day one of a scheme driven by such a policy, 60% of maritime emissions will be covered. Currently the coverage is 0%.”

The revenues generated from IMERS would be collected by a “supranational” body and given to developing nations, rather than being collected by governments. This, Stochniol argues, would help to ensure they were directed to three aims: the development and transfer of new technology to ships to reduce emissions, emissions mitigation, and adaptation to climate change in the developing world.

Given that 60% of maritime emissions would be subject to the regime (Annex-1’s share of worldwide imports), a charge of $10 per tonne of CO2 would raise $6 billion in 2012, of which $2.5 billion would go “towards adaptation”, Stochniol says. “The charges are effectively paid by end users in Annex-1 countries.”

Now he must hope that his scheme gains traction with lawmakers in the UK and further afield. “The UK can lead, and show it is proactive in this complex area,” says Stochniol.

HAVE PLAN, WILL TRAVEL

Dr Andre Stochniol decided to explore his longstanding interest in climate change after his daughters had left home for university. He resigned from a consulting business to pursue the IMERS scheme.

“I was interested in adaptation, which is so important in addressing climate change,” he says. “Mitigation alone is not enough. People who are going to suffer the most from climate change are the most vulnerable. Yet these countries and their people contributed to climate change the least.”

The development of IMERS has taken him, appropriately enough, around the world. He first pitched the idea here in the UK, and then in Norway and Denmark. He also worked on the plan with the International Maritime Organisation.

His travels took him to South Africa, Germany, Canada and the US before he brought the idea to the Department for Environment, Food and Rural Affairs in the UK.

DEVELOPED COUNTRIES PICK UP THE BILL

IMERS would mean that all emissions made by ships travelling to Annex-1 countries and unloading cargo would be included in the cap and charge scheme. Ships travelling to non-Annex-1 countries would not be included. Ships unloading goods in both would have a proportion of their emissions included, based on the proportion of goods unloaded at the Annex-1 destination. The liable entity in IMERS is the ship: ship charterers or owners would pay the emissions charges.

Under the United Nations Framework Convention on Climate Change, established in 1992, the Annex-1 countries are: Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, UK and US.

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