@ London: MEPC 59, and climate financing

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.

Climate financing: make-or-break

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.

Simplified version of IMERS

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).

MEPC 59 summary on Air Pollution (agenda 4)

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 outcome of MEPC 59 does not include any compulsory measures, and as such can be seen as limited in its effectiveness. The Committee, inter alia:

1. Agreed to circulate two interim guidelines for Energy Efficiency Design Index (EEDI) for new ships (method of calculation, and voluntary verification);
   
2. Agreed to circulate the Guidance on the development of a Ship Energy Efficiency Management Plan (SEEMP) for new and existing ships, as well as guidelines for voluntary use of the Ship Energy Efficiency Operational Index (EEOI) for new and existing ships;
   
3. Agreed a work plan (J10 paper) for further consideration of market-based measures at the next biennium of the IMO, taking into account relevant outcomes of COP 15 (effectively from MEPC 60, in March 2010 onwards).
   

EEDI, SEEMP, and EEOI are intended to be used for trial purposes. They are to be refined at the MEPC 60 in March 2010, with a view to facilitate decision on their scope of application and enactment.
For the market-based measures, the Committee also noted that there was a general preference for the greater part of any funds generated through such measures to be used for climate change purposes in developing countries through existing or new funding mechanisms under the UNFCCC or another international organization.
The outcome of the MEPC on GHG emission from ships will be reported to COP 15, which will consider a successor instrument to the Kyoto Protocol to the UNFCCC.

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).