Thursday, December 3, 2009

Copenhagen ..... How Will It Affect The Shipping And Logistics Industry ?

We Analyse the Emission Reduction Targets so far Announced – for What They are Worth
Shipping News Feature

COPENHAGEN – As the great and the good assemble here ready for the forthcoming debate on climate change we attempt to analyse what the major powers have set out as their opening salvos in what is likely to produce enough hot air to warrant restrictions of its own. The importance of these talks cannot be overstated and the effects will ripple through the freight community well past the foreseeable future.

Breaking down the political statements from each country as to their emission aspirations going in to these talks presents one with a minefield of half truths, shrouded facts and deceitful intents. Just to start you can ignore the percentage reduction targets trumpeted by individual nations unless you are prepared to root through the underlying facts behind the pronouncements.

On the face of things some of the leading nations’ figures read as follows. Reductions offered initially are:- US different targets from different parts of the administration. White House says 17% by 2020 Senate 20% by 2020. Both agree on 83% reductions overall by 2050. China says 40%, the EU 20%, but 30% in the same period if non EU European nations concur. Scotland 42%, Singapore 16%, India 24% all of these percentages are reductions to be achieved by 2020.

So, that’s simple. Everybody on the same page. Well no. Firstly to construct meaningful, easy to adhere to and comprehendable limits one assumes these nations are all starting from the same base year.

The EU reductions are against 1990 levels. Most of the rest particularly the US,China and India are against 2005 levels. This means the EU reductions for example are just a tiny fraction in percentage terms against current pollution levels.

It gets worse. The Indian figures are not much more than gossip rather than a clear statement of intent, the Chinese figures are not actually calculated the same way as the others as they are based on a percentage of Gross National Product, if the economy rises then its OK for pollution to rise right alongside it, couple that with the incredible rate the Chinese are constructing coal fired power stations and one must doubt the accuracy of their predictions.

Singapore says 16% but only if they want to, like many of the others there is no guarantee of any binding commitment.

India say they need finance to assist their rumoured targets, particularly to reach their goal of 20 Giga Watts of Solar Power by 2020, otherwise they seem to be saying their pollution levels will rise by up to 40%. The Chinese and Indians both point out that per capita their carbon footprint is about one eighth of that of the West and therefore they need finance to compensate them. The Chinese want $400 billion per annum, Gordon Brown says he’ll pop down the bank for $100 billion of it, the Germans say the EU could stump up a total of $50 billion with the balance, by implication from the States, the EU itself is talking about $150 billion, in other words there is a considerable amount to talk about.

The US figures are particularly damning. Bush was lambasted at the time of the Kyoto summit for failure to commit enough, quickly enough. Now the perceived as green Obama administration is about to promise17% cuts for a date eight years later than the Kyoto target of 2012. That’s seen by many as less than Bush originally aimed for in real terms.

So where does that leave the shipping industry. Well expect lots of talk about the latest ship technology, seafreight causing enormous amounts of pollution etc. without much mention of the fleets of container vessels, bulk carriers and tankers laid up around the coasts of the world. The hope is that governments will subsidise existing and advance technology projects, like many featured before by Handy Shipping Guide, to enable the industry to cut its greenhouse gas emission levels in line with any targets actually agreed upon.

Air freight is likely to proceed as at the moment with newer cleaner planes replacing more polluting models. Aircraft pollution, although much discussed, represents only a tiny percentage of the overall problem. Expect to see more electric and hybrid trucks on our streets and the continued development of intermodal rail freight terminals world wide and infrastructure overhauls throughout.

As long as the money holds out.