Decarbonizing shipping while ensuring an equitable transition

This Insight Brief explains why equitable transition must be an integral part of shipping’s decarbonization transition and International Maritime Organization’s greenhouse gas emissions negotiations.

October 27 2022

Shipping, unlike many sectors, has the benefit and advantage of a global regulator, the International Maritime Organization (IMO), which has the authority to drive a global energy transition, necessitated by climate change and mandated by the Paris Agreement temperature goal.

Any regulation designed and adopted by the IMO is the output of wide acceptance by member states in the form of consensus. Achieving consensus means finding a compromise that represents what can be accepted by the most geographically and economically diverse member states.

In relation to the revision of the IMO GHG Strategy and adoption of mid- to long-term measures, IMO Member States have increasingly called for an ‘equitable’, ‘just’, ‘fair’ and ‘inclusive’ transition, or some combination thereof.

The concept of an ‘equitable transition’ now constitutes a key issue in the negotiations on GHG emissions reduction and is central to progress. However, different terminologies are often used interchangeably both inside and outside the IMO, with little clarity on what each may mean in terms of future policy.

This Insight Brief explains why prioritizing an “equitable transition” is a necessary part of shipping’s decarbonization transition, and it presents some of the elements that an equitable transition could include. The aim is to summarize with no intention of prejudging upcoming IMO meetings, or prescribing an exact definition or application.

This Insight Brief seeks to contribute to the policy debate on an equitable transition while recognizing that such a debate and the resulting multilateral agreement should be procedurally fair and put climate vulnerable countries, especially SIDS and LDCs, at the heart of the process and policies.

Creating a shared understanding across all countries of these related transition concepts, particularly of equitable transition, and what policy could entail would be a major step towards the adoption of a Paris-aligned GHG strategy and an effective basket of mid-term measures. Recent analysis has sought to organize these overlapping and interdependent concepts and to synthesize some of the elements that appear most relevant to each term (see figure 1).

The concept of a ‘just transition’ appears to have strong roots in the labor movement, being focused more on an individual level and applying predominantly to supporting workers and communities through the transition in areas such as education, reskilling, and safety. It can also be addressed at a national and company level. Within the shipping sector, it is largely being progressed by the Just Transition Maritime Task Force.

‘Inclusive transition’ is often applied to discuss the technology and innovation that will be required as part of the transition and to ensure equal access to opportunities, potentially through innovation partnerships, technology transfer, and capacity building and development. The term ‘fair’ appears to be associated with the policy process itself and making sure that representation in the process is diverse and relevant, with climate vulnerable voices at the heart of decisions.

‘Equitable transition’ is focused on a country level and is predominantly linked with the United Nations (UN) principle of ‘leaving no one behind’. Ensuring an equitable transition is seen by many countries as integral to gaining consensus in the process of revising the IMO GHG Strategy and agreeing on the economic and technical measures to achieve the GHG emissions reduction objectives.

The Insight Brief concludes that at a minimum, ensuring an equitable transition would appear to currently require:

  • Explicit inclusion of the concept in the Revised IMO GHG Strategy
  • Addressing the existential threat posed to climate vulnerable countries by aligning policies to limit warming to 1.5 degrees. ‘
  • Assessing and addressing, as appropriate, disproportionately negative impacts that can arise from GHG policy measures on States, particularly on SIDS and LDCs, This should include defining ‘disproportionate’ and then using a reliable state-of-the-art methodology, scientifically capable of capturing specific geographical and socio-economic characteristics of impacted States, which is crucial for determining the outcomes of the assessment.
  • Adoption of an economic instrument, as part of a basket of measures, which implements the Polluter Pays Principle to economically drive the energy transition, by addressing the price gap between new scalable zero- emission fuels and incumbent fossil fuels.
    Revenue generated by an effective market-based measure (MBM) to be, at least in part, allocated towards supporting the mitigation, adaptation and resilience of those most in need, i.e. SIDS and LDCs.
  • Consideration of indigenous people who, despite historically poor representation in multilateral processes, are connected both economically and culturally to the land and ocean, experiencing unique threats to their way of life.

A fair process where representation and participation of climate vulnerable countries with limited resources is supported is essential for achieving the above and ensuring the  equitable transition. In addition to potential revenue from an MBM, other equivalent financial support could also be explored.

These elements are not considered exhaustive and represent a small summary of broad and progressing debates. It is also crucial that industry action, as well as global policy is geared to enable access to new opportunities, technologies and scalable zero emission fuels in developing countries, particularly for SIDS and LDCs.

Read the full insight brief here.

The views expressed in this Insight are those of the author alone and not necessarily those of the Global Maritime Forum. Excerpts may be published with reference to the Global Maritime Forum.

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