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This week a two-day experts workshop in London is considering the candidate mid-term GHG reduction measures ahead of the IMO confirming the revised Strategy for Shipping's GHG emissions reductions at MEPC80 in July.

The Pacific high ambition positioning on measures calls for combining a GHG Levy followed by a global fuel standard to ensure an Equitable, 1.5oC-aligned transition of International Shipping.

Aileen Sefeti led off the workshop with this presentation, setting out the 6PAC arguments for this combination to be included in the revised Strategy at MEPC80.

By Maria Sahib (Micronesian Centre for Sustainable Transport)

It was a week-long battle for members of the International Maritime Organisation (IMO) at the 14th Session of their Intersessional Meeting of the Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 14). The group has been meeting on critical issues relating to the reduction of GHG emissions in shipping by 2050, including the review of the Initial IMO Strategy of 2018. The review of the Strategy carries the aspirations of the most climate-vulnerable countries because they are the ones who are most affected by the impacts of climate change. For some of these climate vulnerable countries, climate change poses an existential threat.

The four main areas that the ISWG-GHG 14 covered were (i) the calculation of the lifecycle GHG emissions of international shipping’s energy; (ii) the pathway/rates of the GHG reduction and the overall strategy to guide GHG reduction efforts; (iii) policy options such as carbon pricing and fuel standard and the specifics of those policy options that will regulate and incentivize; and (iv) the support for ‘just and equitable transition’ to guide further work on mid-term measures and other relevant initiatives, operationalising this in the Revised Strategy.

The ISWG negotiates technical aspects of the debate and works towards developing a consensus on the types and features of future policy measures. ISWG-GHG 14 enabled the process of achieving convergence and provided some insights into how the debates will conclude at the upcoming Maritime Environment Protection Committee’s 80th sitting (MEPC80). The discussions relating to the revision of the Initial IMO strategy concerned the vision, the levels of ambition, the scope, the guiding principles, as well as the mid-term measures and just and equitable transition.

The Pacific High Ambition Coalition, or the 6PAC, at the ISWG-GHG 14 consisted of Fiji, Kiribati, Marshall Islands, Solomon Islands, Tonga and Tuvalu, together submitted four proposals on various aspects of the revised strategy, including on the level of ambition, vision, basket of measures, timelines; just and equitable transition; revenue disbursements and legal principles.

The 6PAC stood their ground and made significant interventions to keep the SIDs’ and LDCs’ issues at the forefront of the debate. On the levels of ambition, the 6PAC endorsed the GHG reductions of the Science Based Targets Initiative's 1.5-aligned pathway. However, the IMO would be providing information to the next negotiation on the viability of these reduction levels and their different pathways based on their fuel/technology availability study. On the vision, the Chair proposed to keep the text in abeyance. On the basket of measures, 6PAC continued to push for a GHG levy (RMI/Solomon Islands proposal) and a global fuel standard, but the meeting recommended an ad-hoc expert workshop at some point in May to discuss and compare the different proposals in terms of compatibility, effectiveness and feasibility. The basket of measures would be discussed further at ISWG-GHG 15 in June. The members thought it was still too early to discuss the revenue generated as a by-product of the market-based measure, therefore it was proposed that it should be discussed after MEPC80. The term ‘Just and Equitable Transition’ received better understanding and many acknowledged the difference between just and equitable.

The working group agreed that no one should be left behind, and a just and equitable transition for decarbonisation of shipping was important. They also agreed that any measure should be climate effective. There are about 14 weeks between now and MEPC80 and there was still much work needed to be done in order to achieve the mandate of the Pacific SIDs if we were to achieve zero emissions by 2050.

$80 billion p.a. in pollution levies on the table at IMO

And how much will be committed to the priority needs of the climate vulnerable depends on the skill and stamina of our Pacific negotiating teams over the next 6 months. This week the Republic of the Marshall Islands and the Solomon Islands lodged four new submissions at the International Maritime Organization calling for greatly increased and 1.5 commensurate levels of ambition, commitment to an equitable global transition and for shipping to agree a high price on GHG. It is the largest and most ambitious carbon price call for any sector in the world. They need other Pacific high ambition voices to join them.

The science and the economics are clear, the transition requires a paradigm shift, but it is technically possible and achievable – if we go hard now. And it could be a game-breaker for Pacific states. In Fiji we have known this for a decade. It was the first lesson from a brand-new research program I founded with then USP Economics Professor Prasad in 2012. A decade on, the costs and risks are much higher. Our research partners at UCL calculate that failure to act will cost shipping a $100billion p.a. from now on in. Delaying will always cost more. The Pacific will always pay the highest price if it isn’t proactive. This time, thanks to the continual leadership of the Marshalls and Solomons, it is on the front foot.

Since the late Tony de Brum led a high-level diplomatic delegation to the IMO in 2015, a steady and disciplined high-ambition Pacific coalition, supported by the best available local and international research, has continued to consistently move the dial on forcing 1.5 to the top of shipping's emissions reduction program.

In July the IMO must agree its revised Strategy for GHG emissions. It will be a watershed moment for this UN agency – its credibility is on the line. Will this large and essential emitting sector choose to lead the necessary climate response and commit to a hard hitting package of measures to achieve it. It is being called shipping's 'trillions transition', the greatest investment opportunity in shipping's history. Today we see clear evidence of large industry – Maersk, Trafigura, Lloyds, etc – and big shipping countries – Norway, Korea, China, Japan, Singapore – positioning their economies to benefit from next generation, GHG free shipping. But it will come at a global cost – one currently borne by the smallest and most vulnerable, and by future generations.

At the heart of IMO’s negotiations is the question of what to do with the revenues that the Strategy will generate?  It has taken the Pacific five years of patient diplomacy to get this most critical issue back on the agenda. There is now general agreement that shipping will put a price on its emissions and that a byproduct of a market based measure is the money they raise. The Marshall Islands and Solomon Islands proposal is by far the most ambitious – the World Bank values it at between $60-80 billion per year. The Pacific is calling for it to be in place by 2025. Other proposals are less ambitious but would still raise significant sums. The Japanese counter proposal, for example, is valued at about $40 billion and would almost all go to mitigation.

The hard work of our tiny Pacific delegations at IMO means that the concept of an Equitable Transition, one that leaves no state is left behind, is squarely in the frame.  Consistent effort by Marshalls, Solomons, Tonga, Tuvalu, Kiribati, Vanuatu and Fiji has successfully ensured that "the particular needs of SIDS & LDCs" and "Equitable Transition" are now firmly cemented into the text. But what that means in practice and how well the Pacific is positioned to maximize the benefits from all this diplomatic effort will be the test back at home.

The hard yards at IMO are the key to unlocking much needed financing revenues for transitioning our domestic fleets to better and cleaner technologies and more appropriate and affordable shipping. For this, the Pacific needs billions and it cant be all or even mostly loans. And it is key to much more. What is the share of a 'trillions transition' that is needed if our states are not to be left behind? And how will we be compensated for the inevitable disproportionate increase in shipping costs our countries will inevitably face?

I note the recent Samoan suggestion that increased shipping costs might be met by owning the container ship. However, I assure Samoa that any ship that they own that runs on fossil fuel is going to be an ever-increasing cost item. The solution to the shipping dilemma and future shipping costs rests with the skill of Pacific delegations at IMO - now. They have worked diligently and quietly for us for the last seven years. They need and deserve our countries' full support – now.


Mr. Kitack Lim, Secretary-General of the International Maritime Organization, flanked by members of the Pacific Delegation, John Taukave (L) and John Kautoke (R) during the Marine Environment Protection Committee (MEPC) - 79th Session.

Author: Dr Peter Nuttall, Micronesian Centre for Sustainable Transport