Getting Ready for Climate Action- Industry at the Helm

Multiple times I’ve lamented the impossibilities of predicting the future, and I won’t invoke Yogi Berra quotes on the subject. With a just finished week full of discussions all about climate (which, in the maritime context, are looking 29 years out, to 2050), my emotions range from Exhilaration to Frustration. The good side, the “E”, recognizes that it’s been too hot and there’s been too much rain, so we need to change things around. The bad side, the “F”, realizes the audacious and enormous amounts of efforts that are required, the impossibilities of collaboration across geographies and market segments. Over the past few days, I gleaned that shipping contributes something like 3% of carbon pollution and the cost to decarbonize the business ranges somewhere between $1.4 trillion to $4 trillion, or a mere $49 billion – $138 billion annually. As the United Nations began its annual meetings, in person after last year’s pause (happily, I am not in midtown this week to enjoy the gridlock), a group of influencers and heavyweights (described as a multi-stakeholder taskforce put together by the Getting to Zero Coalition – a partnership between the Global Maritime Forum, the World Economic Forum, and Friends of Ocean Action) signed a “Call to Action” for decarbonizing maritime- to be presented prior to the upcoming COP 26 Climate meetings in Glasgow.

This gauntlet (what else to call it?) asks governments to get behind taking the carbon out of international shipping by 2050; to support large scale zero emission shipping projects at a national level; and to put regulations in place that will incentivize shipping to opt for zero emissions by the end of the decade. At least one supporter of the Call to Action, a large Norwegian shipowner, said: “In my view, that <zero emission vessels by 2030 > can only happen if and when we’re willing to put a price on carbon.” Yes, real markets will be required to determine the pricing; if a “levy” is chosen rather than traded prices, presumably the exact pricing will have been informed by my commodity boffin friends. Let’s hope for such reality.

As an aside to all this- maybe actually central to my thoughts, the NY Times (NYT, one of my non-favorite mainstream publications) had an article earlier this week talking about the inability of policy “experts” to forecast anything geopolitical, and suggested that betting markets would actually do a better job. The NYT article dealt with military aftermaths, like Afghanistan, and not commercial outcomes, but readers will remember my discomfort with and suspicions about punditry in general. With climate change generally, we have many such folks- all totally well intentioned (they don’t like heat and rain either, I get that); their influence has indeed been infused into maritime discussions. Unlike shipping folks, these people may speak the lingo of diplomats and representatives at the IMO meetings, but they don’t hang out with my commodity trading buddies, or with other players in speculative markets.

But where I’m starting to come out on all this is that industry really needs to take the wheel-and guide the regulators on the voyage so their actions are in synch, but don’t let the policy and diplomatic types lead us down the wrong fairway. One trade organization, the International Ship Managers Association (Intermanager) has called for a unified voice for shipping, noting that: ““IMO does its job very well but it is not the voice of shipping nor was it ever intended to be.” Intermanager suggested that a newly formed International Maritime Committee (which would not be confused with shipping company IMC -perhaps reading this from out in Singapore), could be a voice. I take it further, let the industry group sit up in the bridge and actually guide the ship. I’ve suggested in previous columns that, actually, the Global Maritime Forum would be well suited for such a role. They have found consensus where others haven’t.  

But, yes, Intermanager is spot on. Industry needs to have a loud voice, hollering out orders while driving the boat.

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