International shipping made history in London this month, becoming the first industrial sector to agree to internationally binding legal targets for reducing GHG emissions to zero ‘by or around 2050’. The sector accounts for 3 per cent of global GHG emissions every year. The agreement could also provide a much-needed push to other ancillary industrial sectors to go green.
Agreement by the International Maritime Organisation (IMO), comprising 176 member states, relies on a combination of emissions pricing and trading, and gradually tightening global fuel standards to reduce emissions by 30 per cent by 2030, and up to 80 per cent by 2040, before reaching 0 around mid-century.
While the agreement is far from perfect, the decision reflects a compromise between small island nations advocating a carbon levy on all emissions, with standards being tightened over time, and a carbon-trading system that would generate revenues and ease the transition.
The legally binding policy framework will generate revenues that will be available to developing and least-developed countries, to decarbonise shipping and allied infrastructure. The agreement, which India voted for, could provide the necessary boost for its green hydrogen programme.
However, there are concerns that the IMO agreement makes it possible to continue using fossil fuels, such as LNG, and boost unsustainable biofuels that could lead to deforestation or food security challenges.
Predictably, the US did not participate. Instead, it threatened reciprocal charges against any effort to put a price on emissions and, again predictably, sought to derail talks. With the world on the edge and global fragmentation undermining collective efforts, the IMO agreement is welcome news for the environment, and multilateralism.