Strategic Thinking: Are Paris Agreement targets slipping from grasp?
While the impact of climate change can feel abstract and distant, we are already seeing its effects on our industry today. It is most evident in the increasing frequency and severity of extreme weather. The closure of Port Klang in Malaysia due to a typhoon and flooding in December 2021 is a case in point. The shutdown of southeast Asia’s second largest container port (according to the World Shipping Council figures) disrupted a crucial link in the global trade in semiconductors, causing a worldwide shortage and price rises.
When the Intergovernmental Panel on Climate Change says emissions abatement alone is no longer enough to meet climate targets, it’s clear that the world has hard work ahead to tackle a looming crisis. For the first time in April, an IPCC report noted the need to actively withdraw carbon from the atmosphere if the world is to meet its Paris Agreement targets.
As the head of science for IPCC’s Working Group III, Dr Raphael Slade is responsible for the rigorous data review and research that underpins the group’s periodical reports on the state of the climate. The latest report, issued in April, is damning.
“We are not on track to meet Paris Agreement ambitions,” says Slade. “We need to go further and faster. But there have been successes along the way.”
Global emissions are higher than ever and continue to rise; but the rate of increase is slowing. Still, immediate and drastic action is needed to keep global temperatures less than 1.5-2.0°C higher than pre-industrial era levels. Slade explains that, to stay within 1.5°C, the world would need to achieve net-zero emissions by 2050, which would imply reaching peak emissions by 2025.
Combined with other impacts such as cargo losses in severe weather, it is clear that shipping faces major disruptions as climate change advances. In that context, it is vital for the global shipping industry to adopt net zero carbon emission goals by 2050 – ICS submitted plans to the International Maritime Organization (IMO) last October.
Aligning climate ambitions
Industry self-regulation may not be enough to satisfy increasingly concerned governments. Slade believes that the need for more urgent action on climate change will lead to increased pressure on shipping – and its sister ‘hard to abate’ sector, aviation – to come into line with emissions reductions targets in other sectors.
“I think that shipping and aviation will increasingly be drawn into targets in line with the Paris ambitions and we will see some of the measures deployed by national governments to reduce emissions extended to shipping,” he says.
There is better news on the technology front. When it comes to developing large-scale renewable electricity infrastructure, solutions have never been more affordable.
“One of the true surprises was the speed with which the cost of wind, solar and battery technology has decreased, by up to 85% since 2010. No-one would have predicted that ten years ago.”
For ship power, the cost challenges remain due to the relatively lower maturity and scale of these technologies.
Effective climate policy
The lower cost of renewable energy technologies and the decelerating growth of emissions are partly the result of stronger policy over the past decade. More than half of global manmade emissions are now covered by climate laws. Quantifying the impact precisely is difficult; Slade points to IPCC estimates which suggest that effective climate policy has cut emissions by billions of tonnes and several percent.
It is also tricky to identify where policy could be strengthened to provide the emissions reductions gains needed. While COP26 came too close to the report’s publication to be considered, IPCC found in a later review that the announcements that flowed from the Glasgow climate meeting will not be enough to put the world back on track with the Paris Agreement.
“We did look quite generally at what kind of policy had been effective,” says Slade. “The policies that worked the best were the ones that fostered cooperation, for example in developing technologies, and those that are backed by rigorous monitoring and policing.”
Cutting carbon fuels
The main element of shipping’s decarbonisation will remain the uptake of alternative fuels. For several reasons, the widespread use by shipping and aviation of clean fuels is typically forecasted as starting much later than for other static and land-based industries.
The rationale is clear; hard-to-abate sectors cannot be electrified easily and the electricity or biomass needed to create new fuels can often be used more efficiently elsewhere. But Slade has a reason for turning that argument on its head.
“Precisely because it is difficult, I believe it makes sense for shipping and aviation to start earlier. The technologies needed to use these fuels in shipping still need to be developed from quite an early stage of readiness, and that will take a long time.”
This issue will be confronted at the IMO’s Marine Environment Protection Committee in June. The committee will consider an industry proposal to establish a research and development fund that will contribute to advancing clean ship technologies paid for by a levy on fuel.
There are reasons to believe that the Paris Agreement targets can still be met. The dip in emissions during the early stages of Covid showed what can be achieved, even if it was not sustained. And the shift towards energy independence, prompted by Russia’s invasion of Ukraine, could accelerate the scaling up of renewables infrastructure.
But with vastly greater emissions ambition needed on all fronts, IPCC’s latest report raises the prospect of significant structural change across governments, public behaviour and industries if the world is to save itself from the consequences of rampant climate change.