by BP Shipping and Merrill Lynch. Having faith in the experts in their field to develop a global trading scheme, with clearing house and verified traders to trade shipping's carbons emissions is one thing, but some will still ask where the carbon credits will be derived from. In other words, how will efficiencies be created to create credits?
Foundation for Investment
By its very nature, emissions trading encourages the development of innovative environmental technologies. Clear and managed trading schemes provide the foundation for investment in new technologies, giving confidence to technology developers that markets will be available to provide context and opportunity to retail their products.
There are an array of technologies that are fully classified or close to classification that the IMO itself has identified could form the basis for its shipping index, a scheme designed to encourage efficiency optimization in shipping. Technologies such as engine reheat, twin propellers, the azipod, kappel blades wing tipped propellers, sails, and air cavity systems alone offer ship owners significant increases of fuel efficiency. Many of these technologies require a market in which to grow and flourish; ETS provides that, while also encouraging new innovations. It is an encouraging momentum that neither simply taxing fuel or carbon output would inspire. Moreover, ETS is flexible. It has been well-documented that successful market based schemes have been
extended to cover emitters that might not otherwise be covered by regulation. From a shipping perspective, while an initial scheme might target larger ocean-going vessels, a successful scheme, for example, could be extended to tug boats, fishing fleets and inland barges in time. SEAaT, which is sponsored by BP, Carnival, Shell, Teekay, Stena Lines and the Norwegian Shipowners Association, has, since its inception in 2002, looked at means of providing cost-effective means of achieving vital environmental goals. Through our work around ETS and our increasing experience and understanding of land-based mechanisms, we believe the IMO could begin to consider the role that ETS can play in reducing ship emissions.
About the Author John Aitken is the SecretaryGeneral, SEAaT
While ETS may not see shipowners make the plunge into carbon trading that saw Porsche make more money from their hedging strategy than in three years of selling cars, efficient shipowners will be rewarded through ETS.
March 2009
www.marinelink.com
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