Greenhouse Gases and Open Registries

The International Maritime Organization (IMO) doesn’t normally make headlines, but its new strategy to reduce greenhouse-gas emissions from shipping is a considerable accomplishment. If it succeeds, emissions from international shipping will be 20 percent below the 2008 level by 2030, and 70 percent below by 2040. “By or around, i.e. close to” 2050, the industry is supposed to have net zero emissions.

That last commitment, which contains an escape clause allowing for “different national circumstances,” has drawn both praise and criticism around the world. Puzzlingly, though, there has been almost no attention to the specific measures required to achieve the IMO goals.

This is not a minor issue. Some 105,395 ships of 100 gross tons and above are now on the seas, not counting fishing or military vessels, according to the United Nations Conference on Trade and Development (UNCTAD). The IMO itself doesn’t oversee them. Meeting the IMO’s targets will require action by national governments, which regulate the individual ships that fly their countries’ flags.

But this regulation is often nominal. UNCTAD estimates that ships registered in Panama, Liberia, the Marshall Islands, Malta, and the Bahamas are responsible for 43 percent of maritime greenhouse-gas emissions. All these countries operate open registries, offering favorable taxes and light regulation to shipowners based elsewhere in return for vessel registration fees. All of them rightly fear that if they make it more costly to operate ships, shipowners will decamp to a more tolerant registry. In any case, most of them lack the bureaucratic apparatus and professional expertise needed to monitor the greenhouse-gas emissions of hundreds or even thousands of ships.

Open registries, sometimes referred to as “flags of convenience,” have been controversial for decades. They have been blamed for the low wages and poor working conditions endured by many seafarers, the evasion of anti-pollution rules, and the use of unsafe vessels that are overdue for scrapping. Shipowners have successfully blocked efforts to limit their use. If the IMO’s emissions-reduction targets are to be met, countries with open registries will need to become enforcers.

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