How The Shipping Industry Bullied Its Way Out Of Doing Anything To Fight Climate Change

Even as emissions from cargo vessels are surging, the industry is refusing to adhere to the Paris Agreement.

One of the starkest images to emerge after Hurricane Irma made landfall in early September came from the Bahamas. The Category 5 storm’s powerful winds sucked away the ocean from the shore, leaving the small islands looking like mere boulders in soggy seabeds as docks extended over air. In videos posted online, people walked where there was once water, highlighting a rare phenomenon scientists say could become more common as rising global temperatures create tempests that are more violent and less predictable.

Yet just two weeks later, the government of the island nation signed onto a proposal to let an industry responsible for an increasing amount of planet-warming emissions push back the deadline for beginning to reduce pollution.The shipping industry, which is responsible for 3 percent of global emissions, won’t have to start dialing back its emissions until at least 2023 and possibly after 2050 under the a proposal. By that time, parts of the Bahamas could be uninhabitable as seas rise and destructive storms become the norm.

Emissions from the oil-burning freighters that ferry cargo and fuel around the globe are expected to soar from 3 percent of global emissions to 17 percent by midcentury as global trade increases and ships cruise at higher speeds. Yet every major international agreement to reduce planet-warming gases has excluded emissions from ships.

There is a United Nations body charged with regulating the shipping industry, the International Maritime Organization. But as a recent report from the watchdog InfluenceMap found, 31 percent of national delegations to the IMO include corporate executives. Industry trade groups spend untold sums ― which remain secret thanks to what critics described as weak financial transparency requirements and opaque disclosure rules ― lobbying the IMO each year. It sends more representatives to IMO meetings and submits more resolutions than most national governments, which critics say is evidence of the degree to which the shipping industry has captured the primary international body that’s supposed to regulate it.

A chart included in InfluenceMap's <a href="" target="_blank" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="report" data-vars-item-type="text" data-vars-unit-name="5a0b69a0e4b0b17ffce0feaa" data-vars-unit-type="buzz_body" data-vars-target-content-id="" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="article_body" data-vars-subunit-type="component" data-vars-position-in-subunit="3">report</a> outlines how industry groups influence IMO member states.
A chart included in InfluenceMap's report outlines how industry groups influence IMO member states.

The shipping industry’s power is perhaps most notable in small nations that are heavily reliant on shipping. In the early 1980s, the shipping industry began transitioning to the sort of offshore-haven model many financial companies now use to avoid taxes. The owners register their ships under the flags of nations that demand little or no tax. It’s called a flag of convenience.

The practice faced some blowback from critics who said it allowed deep-pocketed shipowners to pay lower wages and avoid regulations, but now roughly 80 percent of the world’s fleet operates under a flag of convenience in an open registry, according to the U.S. Department of Transportation. Panama, its economy built on shipping through its canal, ranked first globally for the most international ships registered there this year, followed by Liberia, the Marshall Islands and Hong Kong. The Bahamas, with its lack of taxes and low fees on cargo, ranked sixth.

An open registry “creates an avenue for shipping companies to influence policymaking,” argued InfluenceMap in its October report.

“Often these registry figures feel as if they have the right to direct state policy of these countries they somehow represent, when really they are just corporate figures in the shipping industry,” Ben Youriev, a policy analyst at the InfluenceMap, told HuffPost.

The IMO states on its website that its job is to craft regulations that protect the safety and security of shipping and prevent marine pollution from ships. But recently it seems to have taken the first part of its charge to mean the interests of big shipping companies.

In 2011, the IMO passed its first and only rule mandating lower emissions from ships, the Energy Efficiency Design Index, which required new ships to improve efficiency 10 percent by 2015, 20 percent by 2020 and 30 percent by 2025.

But then, in 2015, when nearly every rich nation on Earth pledged to start reducing carbon dioxide emissions to combat climate change as part of the historic Paris Agreement on climate change, the IMO refused to make any such promise, leaving the shipping industry free to continue business as usual.

“It is basically right, and we all know that it is.”

- Top shipping executive who read the InfluenceMap report.

The IMO has vowed it will work to address emissions, however. In October 2016, the organization approved a road map that would require shipping companies to start reducing greenhouse gas emissions, but not until 2023. This year, the IMO reaffirmed that timeline after industry groups and countries such as the Bahamas, Panama and Saudi Arabia successfully blocked more aggressive proposals before the organization.

In late September, the governments of Panama and Saudi Arabia submitted a formal request to temper the ambitions of any policy to reduce greenhouse gas emissions because the shipping industry forms “the backbone of international trade for the bulk transportation of raw materials, and for the import and export of food and manufactured goods.”

The government of the Bahamas backed that up with a submission urging the organization to commit “to the decarbonization of international shipping” ― but not until “the second half of the century.” The government of Belize signed onto the Bahamas’ proposed revision, as well as the International Chamber of Shipping, the Baltic and International Maritime Council (BIMCO) and the International Association of Independent Tanker Owners (INTERTANKO) ― three of the world’s biggest shipping industry federations. The proposal would essentially give the industry a free pass for the next few decades.

That leaves enormous potential for growth in shipping emissions between now and 2050. Shipping emission peaked in 2008 at 916 million tons of carbon dioxide, according to Bryan Comer of the International Council on Clean Transportation, and then fell to 801 million tons in 2013 as international shipping decreased in the wake of the Great Recession. But those emissions are on the rise again as global trade picks up and the economy improves, hitting 812 million tons in 2015, the most recently available data from the group.

“We’re going to start seeing exponential growth of emissions over time,” Comer told HuffPost.

As emissions rise, so too does the financial risk of failing to invest early in technologies to reduce them, said Tristan Smith, an academic studying energy and transportation at University College London’s Energy Institute.

“Fully decarbonising shipping is eminently possible over the forthcoming decades, but this is not yet on track and is risking billions of dollars of misdirected investment and lost opportunity,” he wrote in an email to HuffPost. “Fear and misunderstanding of this inevitable change is significant, including in much of the industry and this is holding up progress.”

That message is resonating in some corners of the industry. Last month, Andrew Craig-Bennett, deputy general manager of the British subsidiary of Chinese government-owned shipping giant Cosco, argued in an op-ed in the trade publication Splash 24/7 that the InfluenceMap report got some figures wrong, but “it is basically right, and we all know that it is.”

The IMO, Craig-Bennett wrote, “was captured by the shipowning interests” decades ago. But rather than continue to fight climate regulations, he urged the industry to embrace the change, lest it be forced upon companies when the situation becomes more dire.

“We all know this change is coming,” he wrote. “We can lead it, get rich and be on the side of the angels or we can share the fate of the other rust belt industries. Simple.”

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