Although COP 17 and its forerunner initiatives to foster a cooperative global agreement and response to climate change and global temperature increases are to be applauded, one must consider the impact any such agreements may have on shipping.  

Shipping has adopted numerous measures to minimise its environmental footprint, but what may be expected of it in the near and long term could result in negative impacts globally.  

This important point should not be overlooked at COP 17 when determining allowable GHG emission thresholds on the shipping industry.

The past three years have been a roller coaster ride for world economies, and the reality of even further degradation should not be dismissed.  The shipping sector has not fared well during these times, although the majority continue operations in one fashion or another.  That may be about to change.

With freight rates diving downward, bunker costs spiralling upward, and potentially costly environmental compliance regimes emerging,
it is only a matter of time before a shipowner/operator is forced to evaluate the economics of its business and react decisively.  

The past three years have generated uncertainty and the continuing European Union debacle, economic stagnation in the US coupled with political unrest in the Middle East tells us, the bumpy ride is far from over.

It doesn’t take a genius to figure out that a business, and in this case an industry, can only maintain operations at a loss for so long before drastic corrective measures are taken.   For the shipping world not many alternatives exist when operational and environmental compliance costs dictate voyage cancellations and vessel lay ups will become necessities.

At the end of the day, shipping is a for profit enterprise. As such it must be sustainable, and not only sustainable but also profitable.  If profit margins disappear it is only a matter of time which will dictate OUT OF BUSINESS headlines appearing on the evening news broadcasts.

Let’s not lose sight of the fact; if world economies are unsustainable, what will drive trade?  If the middle class population sector vanishes, out the window goes consumer spending and demand for goods.  Goods which have driven trade and the shipping industry in the 19th, 20th and the 21st Century.

Considering that 90% of world trade is borne on the backs of the shipping industry, a figure that is likely to remain constant, regardless of actual tonnage shipped, the reality is there simply exists no other cost effective means of transporting goods and commodities between continents and across oceans.  However, in this era of economic and political upheaval coupled with declining consumer demand and diminished purchasing capabilities can commerce continue as in the past?  I suspect not!

Although the future is uncertain, and profit margins remain in flux, shipping has not taken a negative position when it comes to reducing its carbon footprint.  

What it does not want is to have disproportionate measures imposed upon it in relation to other industries and its actual footprint.  

As such I believe it favours thresholds be established through the consultative process of IMO rather than unilateral State decree such as is threatened by the European Union.

As the players prepare to debate on climate issues important to all mankind next week at COP 17, it is hoped deliberations and decisions affecting shipping are tempered by the reality, shipping is a for profit enterprise and if too restrictive cost barriers are imposed upon it then business as usual cannot be relied on.  As a result world commerce could well be impacted.

What the shipping industry requires is a realistic lead in time to respond positively to decisions flowing from COP 17, and that it not be expected to become the global philanthropist to sustain trade.  No other industry is expected to act in such a fashion and neither should the shipping industry. 

*For the latest news and views on COP17 visit the dedicated Sustainable Shipping section and the Sustainable Shipping library which features a briefing paper on COP17.