Carbon Emissions FAQ
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Q: What challenges does the unique and complex nature of the shipping industry pose in crafting effective and responsible climate policy?
A: There are several challenges summarized below.
- Global complexity
The global nature of ocean shipping poses a challenge for the effort to craft coherent and practicable carbon emissions policy. The international fleet is owned, registered, and operated in many different parts of the world. The industry's mobile, trans-boundary operations pose a much more complex range of political, practical, and administrative difficulties than economic sectors characterized by fixed operations and stationary sources of greenhouse gases. Significant challenges include how to properly account for international emissions, how to enforce rules equitably among diverse jurisdictions, and how to maintain competitive fairness and balance in an inherently global business. - Duplicative Jurisdiction
While complex and challenging, an international IMO regime would avoid many of the problems that would arise if various nations, regional blocs, and localities were to try to impose their own carbon emission rules, regulations, and regimes. The potential for a multi-jurisdictional patchwork of rules would raise significant concerns about regulatory duplication, inefficiency, and incompatibility. Ocean shipping is a global enterprise with operations that span many different geographic, national, and regulatory jurisdictions. Some container ships call on 20 different ports in 8 different countries per year. - Integrated Supply Chain
Another critical factor that must be considered is that maritime shipping is part of a large, complex, and inter-connected global supply chain. Changes in shipping services can produce effects up and down the chain with significant economic and environmental consequences. For example, carbon rules that raise the cost or limit the availability of certain traded goods may cause consumers to buy alternative products with a greater carbon footprint, in part from increased dependence on carbon-intensive ground transportation. Moreover, irregular or reduced liner services may affect the inventory management practices of producers raising demand for carbon intensive infrastructure and services such as storage, utilities, and ground transportation. A recent study found that the carbon footprint of the seaborne importation of wine to the eastern U.S. is significantly less than the emissions from transporting domestic product by ground, rail, or air. In this instance, economic or regulatory restrictions on ocean shipping could have adverse, unintended consequences resulting in higher net carbon emissions. - Long Lead-time Requirements
The high cost and long life of cargo ships present challenges that must be factored into climate solutions. A single container ship capable of carrying 8,500 TEU's costs approximately $100 million and must be ordered three or more years in advance of delivery. It will operate for 20 to 25 years. Additionally, ships are often ordered in a set of four to ten, since multiple ships of a similar size are needed to operate a single liner service. For these reasons, changes in design specifications require ample planning and sufficient lead-time to be smoothly implemented.
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