Are ‘carbon clubs’ the way to address climate change?

This article is published in collaboration with The E15 Initiative. Publication does not imply endorsement of views by the World Economic Forum.

An Arctic Black Carbon (ABC) ‘club’ would be a cost-effective response to the increasingly dire prospects for ice melt in the Arctic region, global climate change consequences, and regional health impacts. That is the conclusion of a new ICTSD issue paper, Arctic Black Carbon from Shipping: A Club Approach to Climate-and-Trade Governance. The need is urgent in view of the projections of significant increases in the volume of international maritime shipping in coming years in a region that has already experienced twice the rate of temperature increase as the global average.

A ‘club’ approach could be an effective way to address the need. In an international institutional context, a ‘club’ is an arrangement that has a structure of benefits that incentivises participation and compliance among governments and/or other entities – and is smaller than a multilateral organisation. The concept has long been an interest in academic political economy studies, and it is now receiving increasing attention among climate change specialists, including in E15 papers by David Victor, ‘The Case for Climate Clubs’, and Nat Keohane and Annie Petsonk, ‘Creating a Club of Carbon Markets: Implications of the Trade System’. It should be noted that ‘clubs’ can be created to be ‘open’ or ‘ecumenical’ so that  they can be expanded to include new participants who support the goals, programs, and rules of the original participants.

Such an institutional modality would complement the WTO and UNFCCC at the multilateral cores of the trade and climate change regimes, while utilising the expertise and experience of the International Maritime Organization (IMO). The IMO is already formally recognised by the WTO and UNFCCC as an appropriate international agency for addressing both trade and climate change issues. Because black carbon is particulate matter and not a gas, it has not been included in UNFCCC activities, despite the evidence of its great potency as a climate change forcer. Indeed, the Global Warming Potential of black carbon at 20 years is thousands of times greater than that of carbon dioxide.

There are many international institutions and agreements that can contribute to the development of an ABC: the Arctic Council, International Organization for Standardization (ISO), International Energy Agency (IEA), Organisation for Economic Co-operation and Development (OECD), United Nations Environment Programme (UNEP)/Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants (CCAC), United Nations Conference on Trade and Sustainable Development (UNCTAD), United Nations Industrial Development Organisation (UNIDO), the Gothenburg Protocol administered by the UNECE, the World Bank, and others. The division of labour among the many organisations involved can be coordinated by the IMO.

An ABC agreement can provide that ships may only operate in the Arctic region if they meet equipment and operational standards concerning black carbon emissions. A licence for Arctic operations by individual ships and ship owners-operators can be issued on the basis of certification of the required equipment being installed and properly maintained, as well as meeting operational standards. This can thus be a club-like public-private sector partnership, with participation by ship owners, ship operators, ship registry governments, and governments participating in the Arctic Council. The licencing requirement would be imposed on all types of ships engaged in international commerce in the Arctic region – including oil or gas exploration or extraction activities, as well as ships engaged in the transport of any goods or people.

In addition to a licence to operate in the region, a benefit that could be shared by participants in the agreement (and excluded from non-participants) would be a technology transfer agreement, whereby participants would be entitled to assistance in the acquisition of the required technology to meet participation and compliance criteria.

Of course, a compliance enforcement system would also be needed. Fortunately, there is already in place a worldwide, satellite-based, real-time tracking system that identifies the position, direction, and speed of individual ships. A ship sailing into or through the Arctic region that does not keep its transponder operating in order to be tracked would receive a citation; its operator and owner would face a substantial fine, impoundment of the ship, and cancellation of the operator’s and owner’s right to sail ships in the Arctic region for a period of years. In addition, there could be port checks of equipment such as particulate filters before sailing to the Arctic region, and there could be pre- and post-voyage checks of fuel types and quantities.

In sum, a public-private partnership club can entice sufficient participation and compliance to address an Arctic black carbon problem that is currently projected to become increasingly serious in coming decades. Now is the time to address the problem. There are many technological, legal, organisational, and of course economic questions needing resolution, and for an initial consideration of these, you are invited to read this new paper.

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Author: Thomas Brewer is the Convener of the E15 Expert Group on Climate Change. He is a Senior Fellow at ICTSD.

Image: Sunlight shines just after midnight on a fjord near the Arctic town of Longyearbyen, April 2007. REUTERS/Francois Lenoir.