Assessing the MBM EG’s report Dr Per Kågeson MEPC

Transcript:Assessing the MBM EG’s report Dr Per Kågeson MEPC:
Assessing the MBM EG’s report Dr Per Kågeson MEPC 61 29 September 2010 The Expert Group’s feasibility study and impact assessment of the MBAs A valuable summary and assessment of the proposals Relevant information on abatement measures Interesting but unconventional calculations Good work! Need for two different instruments? To cut maritime emissions substantially over the next few decades policy instruments must affect: Specific emissions from new buildings Retrofitting of existing ships Operation of all ships This may be difficult to achieve by just one instrument Negative side-effects of flexible and cost-effective policy instruments Flexibility would allow maritime transport to contribute to inexpensive emission reductions in other sectors Focusing only on low-hanging fruit may make the shipping sector ill-prepared for challenges to come Science may have underestimated climate change and the need to reduce emissions rapidly Requirements on new tonnage Important to improve the resiliance of the shipping sector and prepare for future mitigation efforts Turnover of the fleet is 30-40 years Accepting sub-standard new builds means taking a risk of having to undertake unnecessarily expensive future CO2 abatement measures The EEDI should be a mandatory supplement to any market-based instrument Comparing with road transport The life of ships is longer than for cars USA, EU, Japan and China enforce mandatory fuel efficiency standards on new cars, supplementary to using MBMs (i.e. fuel taxes) Significant non-financial barriers in both cases Three main options Taxing/charging GHG Fund, LIS, PSL, IUCN Cap on total emissions Norway/France/UK (auctioning + trade) and GHG Fund 3. Reducing specific emissions SECT, LIS and VSL Unconventional methods for calculating Unclear whether EEDI is mandatory in all cases Confuses abatement cost with proceeds Does neither distinguish between private and social cost nor between true abatement costs and transfer of revenues Making calculations transparent Show average and marginal abatement cost, including administration and other transaction costs Show the burden on industry (abatement cost + any charges or any costs of allowances that are not refunded) Calculate net-revenue + discuss how to use it A few remarks on the likely results The ETS is most cost-effective Less burden on industry with the GHG Fund Large in-sector reductions with US SECT and LES, smallest with GHG Fund Possibility for large transfers to LDCs and adaptation/mitigation with ETS and PSL Problems with offsetting by credits Sufficient short- and long-term supply of credits from projects in developing countries? Will other sectors accept market dominance