Executive Briefings

Shipping Industry Not Doing Enough to Reduce Emissions, Report Says

A new report released by the Global Commission on the Economy and the Climate identifies 10 key economic opportunities that could close up to 96 percent of the gap between business-as-usual emissions and the level needed to limit dangerous climate change. Shipping is on the list.

Shipping Industry Not Doing Enough to Reduce Emissions, Report Says

The new report, Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate, states that because shipping companies operate in so many different countries, the transaction cost of having different policies in different states would be prohibitively high. "However, IMO has made little progress thus far."

Two systemic market failures have kept the industry from embracing and rewarding energy efficiency measures. First, there is little reliable information on ship efficiency and the expected gains from different technologies and operational measures. Second, incentives are split between the ship owner and charterer.

Fully embracing available efficiency measures could significantly reduce the sector's emissions, states the report. Fuel represents 50 percent or more of a ship's operating cost, and there are several cost-effective ways to increase fuel-efficiency.

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The new report, Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate, states that because shipping companies operate in so many different countries, the transaction cost of having different policies in different states would be prohibitively high. "However, IMO has made little progress thus far."

Two systemic market failures have kept the industry from embracing and rewarding energy efficiency measures. First, there is little reliable information on ship efficiency and the expected gains from different technologies and operational measures. Second, incentives are split between the ship owner and charterer.

Fully embracing available efficiency measures could significantly reduce the sector's emissions, states the report. Fuel represents 50 percent or more of a ship's operating cost, and there are several cost-effective ways to increase fuel-efficiency.

Read Full Article

Shipping Industry Not Doing Enough to Reduce Emissions, Report Says