Lobbyists successfully capture global deal on shipping emissions
Although the agreement being signed on climate change today is a step-forward, it also reflects the power of the shipping industry to influence IMO negotiations.
The ambition to reduce annual greenhouse gas emissions by 50% by 2050 compared to 2008 is exactly what the International Chamber of Shipping (ICS) proposed on March 2017. In fact, ICS appears to be the originators for many aspects of the agreement reached today; the IMO’s ‘roadmap’ on climate, which delays action until 2023, was proposed by ICS in August 2016; the decision not to strengthen the Energy Efficiency Design Index (EEDI) in October 2016; and the suggestion that green-house gas targets should be non-binding was put forward by the industry group in September 2017. These greenhouse gas targets are significantly below an alternative proposal of 70% by 2050, thought to be much closer to what is needed if shipping is to be in-line with the goals of the Paris Agreement. Although the agreement does commit the IMO to a review with the aim of strengthening the EEDI, given the policy is currently so unambitious that the 2030 target is below the industry’s average efficiency improvements, and it is a commitment to review not act, the industry’s objective appears to have been met.
“Industry has clearly significantly undermined the ambition of the global deal on shipping emissions. During the Paris Agreement we did not have coal companies telling us what was possible. However the IMO’s structure, corporate capture, and funding – which relies on flag states – makes this eventuality almost inevitable”, said Thomas O’Neill, InfluenceMap, Research Director.
Whilst the IMO was undoubtedly determined to deliver a deal on climate, it is questionable as to whether a different type of organisation could have delivered more ambition. Based on interviews with more than ten IMO participants, InfluenceMap understands that IMO policy usually comes into force when a specific number of states, representing a requisite percentage of the world’s registered fleet (measured in tonnage), reach a consensus. With the world’s fleet, along with the global shipping industry, concentrated in a select group of shipping owning nations and ‘flag states’, a complicated power dynamic is resulting that tilts IMO processes firmly in the industry’s favour. Ship owning nations have clear economic influence over ‘flag states’ such as Panama, Liberia and the Marshall Islands that they can use. For example, Japan flags 65% of its ships (in tonnage) in Panama (41% of Panama flagged vessels are Japanese owned). Furthermore, the IMO is primarily funded by flag states, which have provided 40% of its income over the last four years. Thus, although our research suggests that the majority of nation states which expressed a public opinion on the outcome have supported a far more ambitious proposal (including nearly all European nations, low-lying nations, Australia and Canada), it appears countries such as Japan were able to exploit the rules of the IMO – which has a clear deference to flag states – to ensure the consensus was not an ambitious one.