The buy-in pages outline what we can say in public on the progress of IMERS initiative. It covers selected achievements (results), awards, and negotiations.
Selected presentations on IMERS provide some further information, but we cannot provide full disclosure about all ongoing discussions.
Please Contact Us if you require more information or would like to contribute to the buy-in activities in your country, organisation, project or company.
The High-level Advisory Group on Climate Change Financing (AGF) has published its AGF report (0.3MB), as well as eight working papers, including on International Transport (0.7MB). Our Rebate Mechanism is described as a way to compensate cost burden (incidence) on developing countries from carbon price on international transport.
The AGF, established by the UN Secretary General in February 2010, was asked to study potential sources of revenue for financing mitigation and adaptation activities in developing countries.
The final AGF report (0.3MB) was delivered to the UN SG on 5 November 2010 by the AGF co-chairs Prime Minister Meles Zenawi (Ethiopia) and Prime Minister Jens Stoltenberg (Norway). The report concludes that it will be challenging but feasible to mobilise USD 100 billion annually for climate actions in developing countries by 2020. The Group identified a number of different sources that could contribute to reaching this goal.
One of important sources is international transport (shipping and aviation).
An important consideration is how to eliminate or compensate cost burden (incidence) on developing countries from carbon price on international shipping, and aviation. For shipping, the report uses the 30% estimate of cost burden on developing countries based on share of imports, proposed by us. The paper on International Transport (0.3MB) quotes the Rebate Mechanism proposal , developed by us. It further uses the proposal to illustrate that it would be possible to design a mechanism to ameliorate the cost impacts on developing countries (see for instance paragraphs 65, 147-151).
More analysis will follow.
Within relatively short time of 1 year from its creation the hybrid approach (aka IMERS) has achieved high recognition and support. The subsequent design and incorporation of a novel rebate mechanism made the scheme acceptable to developing countries. Selected progress is described in the reverse chronological order below (progress from autumn 2009 still needs to be added).
The founder of IMERS is the winner of the Environmental Awareness in Shipping Award, Sustainable Shipping Awards, 2009. The award is for: A major contribution to raising awareness on how shipping can improve it's environmental record.
Andre received the award at an award ceremony in London on July 15. Over 150 industry experts from across the globe gathered to celebrate those companies and individuals who have made a significant difference in helping to reduce the carbon footprint of shipping.
The Award for Environmental Awareness in Shipping has been sponsored by Wartsila. It was presented to Andre by its General Manager, Mr Torbjorn Henriksson.
He has worked tirelessly with 30 national delegations on shaping the IMERS proposal, half of which were from developing countries. The scheme is based on a market-driven levy on emissions from international maritime transport. It will apply initially to ships carrying goods to developed countries. IMERS is recommended in a variety of reports, including by the Global Leadership for Climate Action, a task force comprising former heads of state and leaders from more than 20 countries.
His activities galvanized discussions on market-based schemes, and significantly increased awareness that emission reductions in shipping are not only achievable but affordable, good for environment and good for business. At the same time they increased awareness of the importance of directing funds from a shipping emission scheme to climate change adaptation – not only mitigation. It was his idea to direct the entire funding raised – estimated at $10 billion annually – to adaptation and mitigation of climate change, and technology and innovation in the maritime sector. His calculations have also demonstrated that the impact on end customers of such a scheme will be minute, as little as a 0.1% increase in import prices, and thereby be readily acceptable.
Dr Stochniol is committed to the continued development of IMERS. The ultimate measure of his success would be if the scheme became operational in 2013.
The winners, decided by an impressive group of internationally respected industry figures, were as follows:
Ocean Environmental Protection - Alfa Laval and Wallenius Water
Clean Air - Port of Long Beach and Los Angeles
Environmental Awareness in Shipping - Dr Andre Stochniol
Environmental Technology of the Year - Skysails
Sustainable Shipping Operator of the Year - A.P. Moller-Maersk
Green Shipping Initiative of the Year - Green Ship of the Future
IMERS: Winner of the Cool the Earth Idea Contest, Japan, 2008!
Andre Stochniol, IMERS' founder, won in the Governmental System/Policy Division (overseas) for:
Creating and obtaining international support for differentiated International Maritime Emission Reduction Scheme to halve maritime emissions and pay for improvements.
The Award Panel has commented:
In the proposed cap-and-charge approach, CO2 emissions from international maritime transport form one emission bubble rather than being allocated to countries. An emission reduction goal (cap) is established and applies to Annex I countries only. Emission charges are linked to the goal and the prevailing forward carbon price. Aggregated funds are used to both stimulate innovations and cost-effectively mitigate growth of maritime emissions. Furthermore, gains generated through the aggregated approach are directed to climate change adaptation in developing countries.
Read on the Contest
The three generations of the IMERS proposal have been discussed at the UNFCCC/IMO negotiations and other fora since 2007. The following links provide summary of the most relevant meetings.
We held an official side event at the UNFCCC COP 13
meeting in Bali on:
A site event was held by Norway on:
International GHG emissions from aviation and maritime transport - follow up of the seminar in Oslo 4-5 October 07. Official workshop conclusions are available (0.1 MB; SBSTA/2007/MISC.29).
Presentations were given by:
Tuvalu has submitted an International Blueprint on Adaptation (0.2 MB) to COP 13. A novel Burden Sharing Mechanism is proposed comprising a levy on international airfares and maritime transport freight charges. Something very close to IMERS. The main differences is that it does not include emission reductions. Additionally, the raised funds will be significantly lower based on the quoted 0.01% base levy. Not the best starting point perhaps to reach a rapid consensus on innovative means to raise the significant funds needed to reduce the gap in financing for adaptation ....(our humble view).
At the UNFCCC COP 13 a Bali Action Plan (0.1 MB) has been agreed that launches inclusive negotiations on post-2012 with an end date of 2009. IMERS would deliver on the four pillars of the Bali Roadmap/Deal.
For impressions and suggestions from Bali jump to On the Road again!
We were very pleased with the very positive feedback on our IMERS proposal in Bali. When implemented, it will deliver the four major blocks of the Bali roadmap for international shipping. We are actively pursuing buy-in activities.full paper (0.1 MB) by Dr Benito Müller.
[...] The key to the astonishingly smooth progress and the early breakthrough in the negotiations on the AF was no doubt the absence of surprises and a raised level of trust [...] This was in stark contrast to the other key negotiations strand on the Bali Road Map which, particularly in the final phase, turned out to have a number of very unfortunate surprises with a concomitant loss of trust.
[...] The one issue that eluded consensus in the small ministerial group was the relevant paragraph (1.b.ii) on the scope of developing country mitigation activities to be considered in the proposed Convention-track negotiations. [...]
[...] At this point the drama started to unfold. Seven seconds after the EU intervention [...]
The unfortunate events of the final morning have turned this into a rather inauspicious beginning, as far as trust building is concerned. [...]
When the plenary convened for the third time [...]
But to think that the US was swayed by this, or indeed by the jeering after their initial intervention, is simply naïve.
[...] As to the medium term, the difficulty will be to find tools to ‘square the global mitigation circle,’ that is to break out of the “we-will-only-take-on-commitments-if-they-do” stalemate which has bedevilled the climate change process ever since the passing of the notorious Byrd-Hagel resolution in the US Senate in 1997 [...] No one ‘in the know’ will underestimate the difficulty of this task. But it is not impossible.
[...] Measurable, reportable and verifiable developing country mitigation commitments will, if at all, only be possible as a package deal with measurable, reportable and verifiable commitments to provide technology, financing and capacity-building by developed countries. Indeed India’s closing statement can and should be read in this spirit:
“The road to Bali was in principle strong, the road from Bali must be much stronger.
We need to move forward to Poland to Denmark, and beyond, for what is at stake is saving our future generations. And therefore it is not a question of what you will commit or what I will commit.
It is a question of what we will commit together to meet that challenge!”
The above excerpts do NOT do justice to the 7 page paper. Read it ALL by following the link (0.1 MB).
On the road already - to Poznan (Poland, COP 14, 2008) and to Copenhagen (Denmark, COP 15, 2009).
With several multilateral "stops" in London at IMO for IMERS!
We held a side event during the 28th sessions of the UNFCCC Subsidiary Bodies focusing on costs and benefits of an equitable hybrid scheme.
We announced and debated results of an in-depth analysis that's started with high-level principles and their impact on various countries and stakeholders.
We clearly demonstrated how the hybrid mechanism can deliver on the UNFCCC principles, especially on the principle of common but differentiated responsibilities and respective capabilities. This focus had been requested by several parties.
The detail of the side event are:
on Thursday 12 June 2008, 18:00-20:00 hours
at the Ministry of Transport, Bonn, Room METRO
The deadlock on addressing GHG emissions from shipping through market-based instruments has not been resolved at the IMO MEPC 58th session, London, UK, 06 - 10 October 2008.
The new creative proposal to reconcile both Global and Differentiated approaches:
Importantly, informal consultations with over 20 representations have proved that a Global but Differentiated Principle and Policy could indeed resolve the deadlock.
Essentially, the deadlock is caused by developed countries proposing only global uniform approaches when developing countries require a differentiated approach (as per the UNFCCC principle of common but differentiated responsibilities and respective capabilities, CBDR).
These two can be reconciled through an entirely new thinking. The old segmentation by flags, countries, routes and so on, is replaced with global destinations. In the current climate change regime the destinations are: Annex I and non-Annex I countries. See the GbD Principle and Policy.
The side event was entitled Impacts of market-based instruments & The search for a global but differentiated policy. Presentation is now available (0.3 Mb). Viability of creating a global but differentiated market-based instrument for international shipping was debated and confirmed.
The event has been organised by WWF UK to expand on the submission MEPC 58/4/39 (0.2Mb), and to provide an opportunity for a debate.
Treating international emissions (from shipping & aviation) as global and aggregating funding for adaptation & technology is seen as a major opportunity for the Copenhagen Agreement.
This was the result from the online consultation at the recent conference on Global Contract based on Climate Justice in the European Parliament.
In the category of policies for the industrialized nations the two most important suggestions voted on by participants were:
The concluding Memorandum is available (0.6MB).
The potential of the IMERS scheme to generate $billions of financing for climate adaptation annually was officially presented and actively discussed at the Poznan Climate Change Conference, 1-12 December 2008. This included a high level roundtable opened by two UN Secretary General Special Envoys on Climate Change: Gro Brundtland and Ricardo Lagos.
How to deliver special debate took place on 9th Dec (Message from the Event )
The dedicated official event was focused on CBDR:
Generating $billions for climate change action
Message & Summary from the Event
Presentation (0.4 Mb)
For more details, see a 4-page description, entitled:
Tackling climate change through a differentiated levy on marine haulage/shipping fuels .
The conclusion from the event and the proposed next steps were presented by Dr Andre Stochniol at the:
The roundtable brought together 20 leaders from both the public and private sectors. It included
Subsequently, IMERS proposal was presented at the dinner of the United Nations Foundation.
We are very glad with the support obtained from the international leaders both at the above events, and during informal consultations in Poznan. These will significantly increase the momentum for action in the coming weeks and months.
IMERS was thoroughly debated at the UNCTAD expert meeting on Maritime Transport and the Climate Change Challenge, in Geneva, 16 - 18 February. Our formal submission (0.2 Mb) and the presentation (0.3 Mb) were entitled:
IMERS solution was very well received by experts from both developing and developed countries. Several experts described it as a concrete proposal to bridge the gap between the CBDR principle (common but differentiated responsibilities) and the need for a global regime for shipping emissions. Some experts called for extra research.
Another perspective of the discussions in Geneva was that the scheme would contribute to increased trade and development for developing countries. This would be achieved by reducing the disproportionally high cost of transport typical for developing countries. The greatest short-term benefits are likely to be achieved by directing some of the funding raised by the scheme to trade facilitation, as shipping efficiencies has reached something of a plateau. Considering that such funding would pull behind several times more financing from the public and private sector significant improvements would be achieved. In short, proposed climate policy would lead to green economic growth.
It has also been pointed out that the imperative to address shipping emissions is already present in at least 14 separate paragraphs of the UNFCCC assembly paper on the Bali Action Plan (FCCC/AWGLCA/2008/16/Rev.1). Half of these refer to a levy on maritime transport (shipping fuel/marine haulage). These paragraphs reflect proposals by different states and organizations. They are: 23 (c )(iii), 26(f), 65(o), 68 (c), 72(d), 72(f), 87(a), 87(b), 96, 154(a), 155 (e), 172(d)(vi), 176(e), 178(a). Our view was that a state submission on the differentiated levy is essential to both the UNFCCC and the IMO multilateral processes (as the next IMO MEPC meeting that could consider such a proposal is after the draft of the Copenhagen Protocol/outcome is needed).
The meeting and IMERS have been reported in several publications, including:
Our differentiated levy to finance climate change action was supported at the side event on day 1 of the Bonn Climate Change Talks - June 2009, entitled: Equitable Financing & Reducing Emissions from International Transport. Event flyer | Fact Sheet | Presentation .
Following opposition of major developing countries to uniform levies, we suggest to modify paragraph 173d of the LCA negotiating text to:
A market-driven levy on emissions from international maritime transport applicable to ships carrying goods to developed countries (effectively).
The Rebate Mechanism (RM) proposal gained further support at a side event at the Bonn Climate Change Talks entitled: "Ensuring no net incidence on developing countries from carbon pricing of international transport", held on 8 June 2011. See:
Event flyer & RM keys | Optimal Rebate Key Study (0.6MB) | RM Presentation (0.7MB) | RM Outline and keys (2-pager) (0.3MB).
For recent discussions at the IMO see: GHG-WG 3 summary.
The debate was very good and covered technical details as well as ongoing negotiations on the matter.
More details will appear after the current round of negotiations,
You may wish to review the RM Presentation (0.7MB), read the Optimal Rebate Key Study (0.6 MB), grab the RM Outline and keys (2-pager) (0.3MB) or see the GHG-WG 3 summary.
The Rebate and Attribution keys for nearly 200 countries are also available as handy 2-page summaries, in three languages:
The report of the High-Level Advisory Group on Climate Change Financing (AGF Report (1 MB)) was noted and the proposal for a separate financing review was removed (see AWG-LCA ).
We held an official side event on our proposal for the Rebate Mechanism; Presentation (0.4 MB) and documents are available.
Several influential Parties were supportive of global schemes for aviation/shipping with no net incidence on developing countries, as recommended in the AGF Report (1 MB) (detailed in the AGF paper on International Transport ). Our rebate mechanism is described/endorsed in the paper.
Below is our summary from Cancun.
The United Nations Climate Change Conference (COP16/CMP6) was held from 29 November to 10 December 2010 in Cancun, Mexico.
In advance of the COP16/CMP 6 conference, both the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) worked hard to convince the international community that they were making good progress on pursuing the reduction or limitation of greenhouse gas (GHG) emissions from international aviation and maritime transport, respectively. Both argued that they should be entrusted with continuing their work, and should do so according to their global rules and provisions.
Both organizations have however failed thus far to reconcile the UNFCCC principles of equity and common but differentiated responsibilities (CBDR) - to be applied at the country-level - with uniform rules, that apply at the vessel/carrier-level.
Some NGOs and countries hoped that the report of the UN Secretary-General’s High-Level Advisory Group on Climate Change Financing (AGF Report (1 MB)) published 5 November 2010 would help to progress the negotiations on international transport in Cancun. The report recommended that any scheme generating revenue for climate action should have no net incidence on developing countries (i.e. zero cost burden). The report recommended putting a price on GHG emissions from international transport, with no net incidence on developing countries, thereby effectively endorsing a certain way of implementing CBDR in international transport. For shipping, the report highlighted a rebate mechanism for developing countries proposed in the IMO (detailed in the AGF technical report 2); for aviation it suggested that universal application may also be more appropriate, supported by compensation options for vulnerable least developed countries.
The general position of developed countries was to eliminate CBDR from a future regime for international transport, while the position of developing countries was the opposite: defend CBDR as the cornerstone of UNFCCC. Furthermore, many developing countries also argued that a uniform approach could constrain their trade and development, and could burden them with additional costs. Overall, the negotiations under the mitigation agenda were highly contentious. The financing discussions never took place, as a relevant opportunity did not materialize.
There was no outcome on international transport at COP16/CMP6. There is no reference to international aviation and maritime transport in the Cancun Agreements (AWG-LCA and AWG-KP ).
Negotiations of the sectoral approaches, comprising agriculture and international transport, were highly contentious. Parties were unable to agree the framing paragraph for the sectoral approaches, in the LCA section 1 b(iv). In fact this prevented specific discussions on international transport, as Parties declined to discuss it until the framing paragraph was agreed. The key issue was whether the principle of common but differentiated responsibilities and respective capabilities (CBDR) is referred to in the framing paragraph, and thus applies to sectors, including international transport.
Given that the AGF Report was noted at the Cancun Agreements, and no separate financing review was mandated, approaches such as the rebate mechanism in shipping that would deliver zero net incidence on developing countries are gaining increased traction. They could break the deadlock on emission reductions from international transport, and simultaneously provide a predictable source of significant finance ($10bn+ annually).
Given our discussions with representatives from over 50 countries, we are cautiously optimistic regarding progress in international transport in 2011 (especially in shipping).
We are actively pushing for it, and are looking for financing support to make the progress a reality.
Financing of climate change action is make-or-break for the ongoing climate change negotiations. This view was expressed by the IUCN delegation at the IMO MEPC 59 session, London, UK, 13 - 17 July 2009. Suggestions for proactive steps were made in the IUCN statement , with specific references to paragraph 173 option 4 of the revised negotiating climate change text (for COP 15).
In the key area of reducing GHG emission from shipping, the meeting issued some technical and operational measures.
The MEPC (Committee) noted that there was a general preference for the greater part of any funds generated by a market-based instrument under the auspices of IMO to be used for climate change purposes in developing countries through existing or new funding mechanisms under the UNFCCC or other international organizations.
However, the Committee was only able to agree a work plan for further consideration of market-based measures. For a more detailed summary see a section below.
The financing aspect of a potential levy on emissions from shipping, or a similar measure, is now being discussed at the UNFCCC. This track still offers hope for 2009, with the scheme potentially starting in 2013.
For instance, the IMERS approach has been recently reviewed and recommended by the African Group (0.3 MB). It was also the African Group who made a small but important adjustment to paragraph 173 option 4 of the revised negotiating text for COP 15 (2.8 MB). The words "for developed countries" were added to the option for levies on emissions from international aviation and maritime transport. The attribution of the revisions were made public only after the Bonn Climate Change Talks, in August.
Our recent informal discussions with negotiators from several developing countries have been successful. They also led to further improvements of the IMERS proposal. In a nutshell, the modified version will be much easier to implement by the maritime industry worldwide. It will be announced at the Bangkok Climate Change Talks (28 Sept - 09 Oct 2009).
Air Pollution was the major agenda item for MEPC 59 with 49 submissions, 11 information documents, and approximately a dozen submissions kept in abeyance from the previous sessions.
The discussions related to two areas: MARPOL Annex VI-related issues, and control of greenhouse gas (GHG) emissions from ships. Only the GHG details are described below.
GHG emissions from ships was the largest agenda item with well over 50 documents for consideration, and the description below is our humble attempt to capture the key points.
The work plan to identify and develop the mechanisms needed to achieve the limitation or reduction of CO2 emissions from international shipping was agreed at MEPC 55 in 2006. It spanned four sessions of MEPC, culminating at MEPC 59. A significant amount of time was allocated for the debate of the item with expectations of delivering a package of GHG control measures at this session. The need was high in the context of upcoming Conference of Parties to the climate convention in Copenhagen, in December 2009 (COP 15). However, for many insiders it was clear, even before the session, that application of the potential measures might be impossible to agree, especially in relation to market-based measures.
Global GHG measures once again turned out to be a very polarized issue in the plenary session, even though general statements were withheld. Essentially, the developed countries argued for globally uniform and compulsory measures. In contrast, developing countries called for differentiated and/or voluntary measures. Specifically, the developing countries stressed the need to comply with the principles of the UNFCCC, including the principle of common but differentiated responsibilities and respective capabilities (referred by many as the CBDR principle). The Committee therefore agreed to consider technical documents by a GHG working group, defer the debate on the application of GHG instruments to the next session and have a plenary in-depth debate on market-based measures. The Committee also agreed to create a work plan for further consideration of market-based measures.
The session also approved the results of the Second IMO study on GHG emissions from ships (MEPC 59/INF.10). The study, shows that in 2007 shipping consumed 333 million tons of fuel and emitted roughly 1 Gigaton of CO2 . The corresponding numbers for international shipping are 280 and 843 millions respectively. The contribution of international shipping to global CO2 emissions is estimated as 2.7%. Estimates of fuel consumption of shipping for 2050 range from 400 - 810 millions tons with corresponding CO2 emission about three times these numbers, assuming no reduction measures are in place. The main conclusion from the report is that substantial reduction of GHG emissions from ships are possible. Market based instruments (MBIs), technical and operational measures should contribute but the largest and most efficient reductions are expected from a compulsory MBI (or instruments).
The latest version of IMERS was well received by many delegations at the UNFCCC climate change negotiations (28 Sept - 09 Oct, 2009). Three weeks later it was disclosed publicly in Singapore (0.4 MB).
Our proposal has also been included in recommendations for negotiators distributed in Bangkok. The recommendations came from a task force comprising former heads of state, leaders from government, business and civil society in a report Toward a Post-2012 Agreement on Climate Change: Recommendations (1 MB).
The recommendations are from the Global Leadership for Climate Action (GLCA), a partnership of the Club of Madrid and the United Nations Foundation (UNF). The report consolidates the key GLCA recommendations for all areas of the Bali Action Plan. It includes financing recommendations from the comprehensive adaptation report, distributed to negotiators in June 2009.
The recent top-down simplification of IMERS, that made the proposal even more attractive, has been discussed "behind closed doors". The proposal has gained more traction with several key delegations.
The details of the new version were disclosed at the Carbon Forum Asia, Singapore, 26 - 27 October.
In a nutshell:
The novel, refund version of IMERS has been tabled at the Barcelona Climate Change Talks (2 - 6 Nov, 2009)!
The proposal Innovative Financing and International Maritime Emission Reduction Scheme has been submitted
A layman 1-page outline is available, entitled: 2 for 1: Financing climate action and Cutting shipping emissions (0.2 MB).
The proposal has been submitted under the track known as 1b (iv), called:
The proposal is linked to the provision of financial resources, namely to paragraphs referring to:
"Levies on emissions from international maritime transport for developed countries ...", and similar.
See the latest: Non-paper No. 54, and Non-paper No. 34.
In a nutshell, the submission proposes to:
The submission has been made possible thanks to leadership of Transport and Environment decision makers in Nigeria, and Liberia (both developing countries). It has been championed by the Nigerian Maritime Administration and Safety Agency (NIMASA) since negotiations in Bangkok, 2009.
The United Nations Climate Change Conference 2009 (COP 15) did not succeed in addressing emissions from international aviation and maritime transport.
To contribute to the ongoing negotiations the proposal for Innovative Financing and IMERS was clarified and debated at the official COP15 side event, 9 Dec, 2009, Bella Center, Copenhagen.
Presentation is available (0.4 MB).
The IMERS proposal has also been discussed in other relevant side events and reviewed in several publications launched at COP 15 (such as the comprehensive The Little Climate Finance Book, available in English, French, Spanish, and Portuguese).
Unfortunately, the actual negotiation process that took place at COP15 was not conducive for any concrete financing proposals. It became however even clearer that innovative/alternative off-budget financing will be essential to deliver predictable financing for climate action from 2013 onwards.
The proposal has been submitted under the track known as 1b (iv), called:
The proposal is linked to the provision of financial resources, namely to paragraphs referring to:
"Levies on emissions from international maritime transport for developed countries ...", and similar.
See the latest: Non-paper No. 54, and Non-paper No. 34.
In a nutshell, the submission proposes to:
Some progress on addressing greenhouse gas (GHG) emissions from ships was made at the IMO MEPC 60 session. IUCN submitted a proposal for an innovative rebate mechanism, based on our work. The proposal (MEPC 60/4/55) , which aims to reconcile the principles of the UNFCCC and IMO, was welcomed but not debated. MEPC agreed to establish an Expert Group on Market Based Measures (MBM-EG) to study it, among other proposals.
The Copenhagen Climate Change Conference in Dec 2009 (COP 15) did not resolve any issues on GHG emissions for the IMO. Therefore, as before at MEPC 58 and MEPC 59, they were contentious at the 60th session of the IMO's Marine Environment Protection Committee (MEPC 60), which took place in London, UK, from 22 - 26 March 2010.
The most contentious issue was whether or not to explicitly take the CBDR principle into account, especially while considering market-based measures (MBM), or instruments (CBDR refers to common but differentiated responsibilities and respective capabilities, enshrined in UNFCCC).
The other contentious issues were whether the measures to reduce GHG emissions from ships should be mandatory, whether the technical measures should be implemented through an amendment of MARPOL convention's Annex VI, and whether the proposed measures were mature enough. In general, the positions of developed and developing countries were opposed on all these issues. Another potentially dividing issue of setting a global emission reduction target for GHG emissions from international shipping was not debated, albeit a couple of papers were shortly outlined.
Some progress was made in the further development of the Energy Efficiency Design Index (EEDI) and related items, but more needs to be done. All the other important issues, including MBM such as the one proposed by IUCN, still need in depth discussions.
To make progress on these issues, MEPC:
Additional detail on progress achieved at MEPC 60 is available from the IMO.
Document MEPC 60/4/55 proposes a rebate mechanism for a market-based instrument (MBI) for international shipping in order to deliver on the UNFCCC principle of common but differentiated responsibilities and respective capabilities (CBDR). The rebate mechanism could ensure that developing countries are not disadvantaged by a yet to be decided MBI but rather benefit from it.
The proposed rebate mechanism can apply to any MBI for international shipping.
Also available are:
The financing aspect of a potential levy on emissions from shipping, or a similar MBI, is increasingly getting more attention. The high-level Advisory Group on Financing of Climate Change (AGF), established by the UN Secretary General considers it as one contributing option. Their goal is to identify sources of innovative financing to mobilize $100bn annually, from developed countries, by 2020. This is to fuflfill commitments incorporated in the Copenhagen Accord, 2009. The rebate mechanism would guarantee that the financing is from the developed countries only, as agreed.
In another development, Botswana in its recent UNFCCC submission reminded about relevant negotiations during COP 15. In short, the draft negotiating text anticipated using revenue raised from a shipping MBI (and aviation) for climate change action in developing countries.
Further progress on reducing greenhouse gas (GHG) emissions from ships was made at the IMO MEPC 61 session. MEPC received a comprehensive 300+ page report (2.5MB) and presentation (2MB) from the Expert Group on Market-based Measures (MBM-EG).
The group studied the various MBM proposals, including the Rebate Mechanism (RM) . Further details on RM were submitted, based on our work.
Two main RM options were described in more details:
For more details see the document, available in 3 languages:
The ongoing UNFCCC negotiations have not resolved any political issues on shipping GHG emissions for the IMO yet, nor has the MBM-EG. Therefore, the discussions on addressing GHG were contentious and time consuming at the 61st session of the IMO's Marine Environment Protection Committe (MEPC 61), which took place in London, UK, from 27 Sept - 1 Oct 2010.
The most contentious issue, as before at the previous sessions MEPC 58, MEPC 59, and MEPC 60, was whether or not to explicitly take the CBDR principle into account (CBDR refers to common but differentiated responsibilities and respective capabilities, enshrined in the UNFCCC).
There was no majority view on which MBMs should be developed further, and certain concerns were raised regarding impact on world trade, and similar. An intersessional meeting in March 2011 will consider the MBMs further.
To make progress on these issues, MEPC:
The technical and operational GHG measures progressed as well. The contentious issues were whether such measures should be mandatory for all countries, whether text relating to capacity building and technology transfer should be a part of regulation, whether the proposed measures should be implemented through an amendment of MARPOL convention's Annex VI, and whether they were mature enough.
The proposed amendments to Annex VI of MARPOL are to be circulated to the Parties by the IMO Secretary General, for consideration of adoption at MEPC 62.
Setting a global emission reduction target for GHG emissions from international shipping was not debated, due to lack of time.
MEPC considered also speed reduction as a regulatory option. It agreed that speed would be addressed indirectly through the other measures, and therefore decided that no further investigation of speed reductions as a separate regulatory path was needed.
Official information on the progress achieved at MEPC 61 is available from the IMO.
Some progress on reducing greenhouse gas (GHG) emissions from ships was made at the IMO Intersessional Meeting of the GHG Working Group (GHG-WG3). The concept of "no net incidence" through a Rebate Mechanism (RM) (0.5MB) generated a considerable interest. An optimal rebate key (0.2MB) was proposed, with values for all countries. A systematic analysis submitted , favoured a global application with a RM to ensure no net incidence on developing countries and with revenue used for climate change action.
The third Intersessional Meeting of the Working Group on GHG emissions from ships was held in London from 29 March to 1 April 2011. At this meeting the concept of "no net incidence" on developing countries (particularly the most vulnerable) from carbon pricing of international transport generated considerable interest from a number of developed and developing States and observer organizations. Inter alia (for more see the session's report, document MEPC 62/5/1):
Regarding details, two session documents contained new results contributed on the topic. The document GHG-WG 3/3/11 (0.5MB), entitled "Towards an optimal rebate key for a global maritime MBM", was submitted by the WWF, based on a study by Dr Andre Stochniol.
A country's share of value of imports from non-adjacent countries, adjusted for trade patterns in Europe and in Latin America, is found to be the optimal attribution key to calculate incidence on the country from a global MBM, for all countries irrespective of their trade distances. The key provides the best estimates of the incidence given readily available and reliable data.
According to the calculations presented, in 2007 circa 70% of global trade by value was transported by sea and air. Of this, developed and developing countries accounted for circa 60% and 40% respectively. Thus, the estimate of total incidence on developing countries from a global maritime MBM is circa 40% of its global costs. This is more than the 30% estimate based on value share of imports by all modes of transport (used before in various reports). However, given that some developing countries may pursue the option of foregoing all or part of their rebates, it is still viable to continue to use the 30% as an illustrative integration condition for a global maritime MBM with "no net incidence" on developing countries.
The summary of the proposed rebate keys, based on percentage of global costs of the MBM, is shown below.
Rebate keys for over 150 developing countries and attribution keys for developed countries are calculated and presented in the annex to the GHG-WG 3/3/11 document (the rebate keys are illustrated below).
Under the RM proposal, the attribution keys are proposed to calculate and credit the amount of financing
raised through the MBM from each developed country (these are illustrated below)
Comprehensive justification for the calculations are made in the study, including trade-weighted distances for countries, as illustrated below.
Conditions to integrate the optimal rebate key with the MBM proposals under consideration at the IMO are provided as well. These are summarized on the figure below (updated to reflect submissions to and discussions at the Intersessional Meeting).
EIS Efficiency Incentive Scheme
ETS Emission Trading System
GHG Fund International Fund for GHG emissions from ships
PSL Port State Levy
RM Rebate Mechanism; add-on, and integrated (IMERS)
SECT Ship Efficiency Credit Trading
For a short summary from the session relating to the "no net incidence" see the WWF document MEPC 62/5/14.
Official information on the overall progress achieved during the Intersessional Meeting is available from the IMO.
The Rebate Mechanism (RM) to enable pricing of international emissions was debated further at a side event at the Panama Climate Change Talks; see:
RM Presentation (0.8MB) | RM Outline and keys (2-pager) (0.3MB).
The debate and discussions that followed, contributed to negotiations of relevant text options for the Durban conference in Nov/Dec 2011 (see the conclusion slide).
The site event, entitled: "Ensuring no net incidence on developing countries from carbon pricing of international transport", was held on 2 October 2011.
The debate was very good and covered technical details as well as ongoing negotiations on the matter (namely how to reconcile the UNFCCC principles with a global approach to address emissions from international transport, and obtain progress at the Durban conference).
You may wish to review the RM Presentation (0.8MB; it includes links to various additional analysis), or read a short RM 2-pager, that also includes the attribution and the rebate keys for various countries, available in English, French and Spanish:
Furthermore, the following analysis and briefing notes are made publicly available:
Links will be added shortly.
Not much, but the WB-IMF-OECD-RDBs report on Mobilizing Climate Finance (0.9MB) is mentioned and finance ministers are invited to continue working on the issue of climate finance.
For the recent discussions at the IMO see: GHG-WG 3 summary, as the topic was not discussed at the IMO MEPC 62 meeting (as the focus was then on the adoption of the technical and operational measures to reduce GHG emissions from international shipping).
There was no material progress on addressing emissions from international aviation and maritime transport at the United Nations Climate Change Conference COP 17 / CMP 7 at Durban. The Parties only agreed to continued consideration of issues related to these emissions, and there was no direct reference to innovative financing arising from international transport (but compromise options were proposed ...).
At the same time, arguably, significant progress was made in Durban through the agreement to negotiate a global deal applicable to all countries!
For details see a short Summary of Fair Finance (includes a map) and/or the full briefing paper entitled Fair Finance: Ensuring developing countries benefit from carbon pricing of international transport (7 MB).
For our RM proposal to ensure no adverse impacts on less developed countries (also referred to as "no net incidence"), see the Rebate Mechanism or a short summary with selected data for SIDS .
Given our discussions with representatives from over 30 countries at Durban, we are cautiously optimistic regarding further progress on an equitable carbon pricing mechanism for international transport in 2012 (especially in shipping).
Working late at night did not help the IMO MEPC 63 to achieve further progress on reducing shipping emissions in early 2012. Two objectives were planned in this area: (1) to adopt a resolution on Technical Co-operation and Transfer of Technology relating to the improvement of energy efficiency of ships, and (2) to launch an impact assessment of the proposed Market Based Measures (MBMs), particularly on developing countries. Neither of these objectives were reached.
A proposal by a group of developing countries for the Resolution was put on hold until MEPC 64, due to reservations from developed countries. The terms of reference to conduct the impact assessment could not be agreed, mainly due to different views from developing countries regarding certain details, including the need to consider compliance with the UNFCCC and the position that the assessment should be done by government experts rather than consultants. MEPC 63, held from 27 Feb - 2 March in London, agreed that no consensus could be reached on either of the objectives and postponed further discussion to its next session (MEPC 64, from 1-5 Oct 2012)
At the session’s opening remarks the new Secretary General, Mr. Koji Sekimizu proposed, among others, that MEPC set itself the challenge of completing all the work on the establishment of a MBM by a target year of 2015, in line with the timeframe established by the Durban Conference for the legally binding global climate change agreement. He stated that the impact assessment should be started immediately and be finalized by 2013 so that MEPC can decide on the specific MBM.
There was good progress on technical matters; the implementation guidelines for EEDI and SEEMP were developed, and finalized at MEPC 63.
However, it became clear early on in the session that the agreement on the Resolution may be challenging (the Resolution was "promised" to the developing countries at the time of adoption of the new chapter 4 to MARPOL Annex VI at MEPC 62). Given the importance that developing countries associated with it, delegation of Brazil stated that if the Resolution is not completed at the session, then any other item that proves to be “immature” would need to be referred to the next session as well (it was clear to many participants that this referred to the impact assessment of the MBMs, which developed countries wanted to launch at MEPC 63).
During the session a large group of developing countries submitted a proposal for the Resolution which varied in certain details from the Chairman’s draft prepared before the session. An informal group facilitated by the MEPC Vice-chairman attempted to reconcile the proposals (working till late hours ... the picture above was taken after one of these late sessions). However the group failed to prepare an acceptable draft text of the Resolution, mostly due to various reservations from developed countries.
The discussion in that area was focused on:
This was relatively simple. The Committee approved the Report of the third Intersessional Meeting of the GHG working group (GHG-WG 3). It noted among others that the GHG-WG 3 acknowledged the findings and conclusions of the MBM Expert Group's report, including its identification that there would be a need for further study of both the direct and indirect impacts on developing countries due to the introduction (and non-introduction) of an MBM for international shipping under the IMO.
This was the most important topic within agenda item 5, and generated significant debate, both at the plenary and during long informal consultations. The main issue was the agreement of the Terms of Reference (ToR) for the impact assessment. However, it proved impossible to agree the ToR by consensus, mainly due to different views between representatives of developing and developed countries regarding certain details (mostly relating to UNFCCC criteria and whether the assessment should be carried out by governments or by consultants). As a result, MEPC 63 postponed the ToR for further consideration at the MEPC 64.
Various views were expressed on this topic, including that the resultant MBM could be a combination of different MBMs or some compromise solution rather than any of the proposals in their initial form. No proposal was eliminated at the session. MEPC invited all MBM proponents to refine their proposals as soon as possible, and not later than MEPC 64.
Furthermore, the proponents of MBM proposals which rely on the Energy Efficiency Design Index (EEDI) were invited to clarify/modify their proposals regarding the use of EEDI.
Given the relevance to our proposal in this area, this section is somewhat more detailed ...
The Committee recalled that MEPC 59 noted that there was a general preference for the greater part of any funds generated by an MBM under the auspices of IMO to be used for climate change purposes in developing countries, through existing or new funding mechanisms under the UNFCCC or other international organizations.
In the debate on the possible uses of revenue from an MBM for international shipping under the IMO and its relation with the wider efforts in the world community to mobilize climate finance for use in developing countries it was, in particular, noted that:
The Committee recalled that at the third Intersessional Meeting of the GHG working group (GHG-WG 3) a large number of delegations concluded that no incompatibility exists between a potential MBM for international shipping under the IMO and the WTO Rules. However, a number of other delegations, notably India, maintained the view that there are inconsistency issues between an MBM and the WTO Rules.
At the session the Committee considered document MEPC 62/5/27 (India) on the possible incompatibility between WTO Rules and a MBM for international shipping, which was deferred from the last session, and agreed to continue the debate at MEPC 64 and invited further submissions and contributions.
Official information on the progress achieved at MEPC 63, on its wide agenda, is available from the IMO.
For more details on why and how to operationalize equity for a maritime MBM, including applicability of the Rebate Mechanism proposal (RM), see the following document, available in 3 languages:
Once more working late at night did not help the IMO MEPC 64 to achieve further progress on reducing shipping emissions in autumn 2012, following a similar attempt earlier in the year. MEPC 64 aimed, but failed again, to agree and adopt a Resolution on promotion of technical co-operation and transfer of technology relating to the improvement of energy efficiency of ships. Further discussions of Market Based Measures (MBMs) continue to be held back, pending the adoption of the Resolution.
The discussions at MEPC 64, held in London from 1 - 5 Oct 2012, demonstrated the need to resolve, on the political level, the question of how to take into account the principle of CBDR, in context of climate change measures at the IMO (CBDR refers to the principle of common but differentiated responsibilities and respective capabilities of the UNFCCC).
Further discussion of the draft Resolution, which seems key to any further progress on addressing climate change in the IMO, will take place at the next session (MEPC 65, in 2013).
Within the IMO, climate finance relates generally to measures to increase energy efficiency of ships and reduce emissions of greenhouse gases (GHG) from international shipping, and in particular to Market Based Measures (MBMs). In this area, the vital objective stated at the opening of MEPC 64 by the Secretary General, Mr. Koji Sekimizu and the MEPC Chairman, Mr. Andreas Chrysostomou (Cyprus) was to adopt an MEPC resolution on Promotion of Technical Co-operation and Transfer of Technology relating to the improvement of energy efficiency of ships (the “Resolution”). Thus the discussion on the proposed MBMs was to be limited at the session.
However, the Resolution was not concluded at the session, while the new submissions on the MBMs were only introduced shortly, given the limited time, and the detailed debate on MBMs was postponed to the next session (MEPC 65). The Resolution was considered under agenda item 4, while the MBMs - under agenda item 5.
A new chapter 4 in the Annex VI to the MARPOL convention was adopted at MEPC 62 (2011), which will enter into force on 1 January 2013. The chapter includes new requirements mandating the Energy Efficiency Design Index (EEDI), for new ships, and the Ship Efficiency management Plan (SEEMP) for all ships. The chapter required several additional elements to be adopted at MEPC 64. The technical elements, namely various amendments and unified interpretations to the 2012 implementation guidelines for EEDI and SEEMP, were developed, and agreed.
However, MEPC 64 failed to agree and adopt once more an element with certain political aspects, namely the Resolution on promotion of technical co-operation [...], which was “promised” to the developing countries at the time of adoption of the new chapter 4 at MEPC 62. A Working Group, facilitated by the MEPC Vice-Chairman, Mr. Arsenio Dominguez (Panama), had a task to debate and to finalize the text for three specific points: CBDR , transfer of technology, and funding. The group developed a text of the draft Resolution, but could not agree on several paragraphs, which remain in square brackets (they mainly relate to CBDR and the transfer of technology from “developed to developing countries”). The committee agreed to use the text, as a basis to finalize the draft resolution, with a view to its adoption at MEPC 65 in May 2013.
Under this agenda item the MEPC endorsed, in principle, the outline for an update of the greenhouse gas (GHG) emissions estimate and agreed that an expert workshop should be held in 2013, to further consider the methodology and assumptions to be used in the update.
Regarding MBMs, the MEPC received updates to several of the proposed MBMs (including on the RM draft legal text considered under climate finance and use of MBM revenues). These were shortly introduced but not discussed in view of time constraints, and following comments by some delegations on the urgent need to finalize the draft Resolution. The MEPC agreed to postpone detailed debate on MBMs to MEPC 65. This would include discussion of the methodology and criteria for a comprehensive impact assessment of an MBM for international shipping, under the auspices of IMO.
Although not related directly to the MEPC 64, on its first day the European Commission announced the proposal for implementing a regional monitoring, reporting and verification of shipping emissions, which was widely perceived as the EU giving up on an EU MBM for shipping.
The draft legal text for the Rebate Mechanism has been developed in consultation with various negotiators. The text was submitted as document MEPC 64/5/10 and introduced at the session by WWF. The document provides draft regulatory text on uses of financing generated from an MBM in form of additions to a potential convention based on the Rebate Mechanism proposal. It is available in 3 languages:
To achieve progress on MBMs for international shipping it seems that the CBDR principle must be taken into account somehow and a new political narrative may help in achieving this. The new narrative may focus on the potential to reduce both the emissions and cost of international transport, while also generating climate finance from developed countries, and contributions to international cooperation from emerging economies.
The progress is not guaranteed though and the complexities of the issues involved cannot be underestimated.
Official information on the progress achieved at MEPC 64, on its wide agenda, is available from the IMO.
There was no progress on international transport at the United Nations Climate Change Conference COP 18 / CMP 8 at Doha, Qatar. No decision was taken on addressing emissions from international aviation and maritime transport, and no specific reference was made to innovative financing from them. Sectoral approaches, including emissions from international transport, were one of the many issues discussed at the Conference, but proved to be an area in which the positions of the major developed and developing countries were too distant to find a compromise.
The AWG LCA track where international transport has been discussed since 2007 has now been terminated. The work program on Long-Term Finance (LTF) was extended for one year, and thus potential financing from international transport may be discussed there. Addressing emissions from international transport may be discussed under the ADP track at some stage, in particular to raise the pre-2020 emission reduction ambition.
In 2013 further discussions on this topic are expected in the respective dedicated organizations, namely at the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), including through the ICAO’s High-level Group on International Aviation and Climate Change (HGCC). Progress in the ICAO would likely help achieve progress in a similar debate in the IMO. However the gap between the Parties’ positions is significant and cannot be underestimated.
We participated actively in the conference, and held an official side event on the Rebate Mechanism (RM).
At Doha our focus was to advance the understanding and political acceptance of how to operationalize equity between different countries through compensatory transfers or rebates, as proposed in the Rebate Mechanism (RM); in particular regarding the generic RM add-on option that may be integrated with any type of proposal for carbon pricing of international shipping (and aviation).
In addition to various in-depth discussions, we held a well attended official side event entitled “Ensuring fair and effective carbon pricing of international transport” on November 27, 2012. At the event the recent additional analytical work on RM was also presented and debated, including on impact of long trading distances.