IMO: Stick to Your [Sustainability] Guns

It looked like there would be a useable Framework to reduce emissions, but at the meeting the US fought its implementation tooth and nail and threatened other states if they accepted it. Some countries buckled under and, with the loss of US support, the oil majors saw their chance to jump ship too.

Then ABS expressed doubt about the Framework, and DNV also mumbled about frustrations and then there was a vote to delay implementation of the framework.

It is disturbing that engineers questioned a regulatory technology deadline. Generally, engineers that question a regulatory technology deadline lack the vision to truly apply themselves to the problem or become entangled and confused in politics. Real engineers simply work at fixing the problem, maybe not succeeding in the first pass or the second pass, but hopefully quicker than the next engineer. But trust, whiney engineers are nothing new, I remember encountering half an industry of those as a young engineer in the car industry.

Around 1985 I spent time at Chrysler’s engineering headquarters in Highlands Park. Chrysler had generously offered us the nighttime use of their Cyber 205 supercomputers to perform detailed finite element analyses of America’s Cup 12M structures.

It was fun to be at their engineering headquarters. At that moment the latest Corporate Average Fuel Economy (CAFE) standard would come into force and Chrysler was the only big three automaker whose engineers had met the standard. Meanwhile, Ford and GM engineering leadership had not paid attention and these companies would incur hundreds of millions in penalties until they could redesign their product line to meet the standard.

A few days later I came into the office and the mood among the Chrysler engineers had completely changed. I asked what happened, and was told that Reagan had given Ford and GM a pass on the CAFE standard because it had been too difficult to implement.

This ignored the fact that Chrysler did meet the standards, and I well remember Lee Iacocco’s outrage at this instance of political corruption. Some may argue that Chrysler had benefitted from a government bail-out in 1980, but that had been paid back with a substantial profit to the government by 1983 for which Iacocco famously stated: "We at Chrysler borrow money the old-fashioned way. We pay it back".

As a dyed in the wool capitalist, I strongly support governments that set standards and then lets industries compete to meet those standards. Any industrialist that sabotages that approach is not a capitalist, but rather a freeloader or a cheat.

A similar thing is now happening with the IMO rollback, those who worked hard at meeting the looming standards have now spent money and effort for no useful purpose, and those who hoped and pushed for a roll back are now making mint. The Framework is fair. It benefits the capitalists who are willing to invest and innovate and removes those who remain stuck in the old ways. Moreover, the Framework benefits the public at large and, in this case, all over the world.

Inevitably some anti-capitalists argue that it would kill the industry and result in layoffs and increase shipping rates. That is a liar’s argument.

Yes, it would increase shipping rates for those who do not meet the standard, and in the short term probably will increase shipping rates to pay for the cost of new technologies. However, since maritime shipping rates are such a small fraction of the cost of products, it will hardly be noticeable by the world at large. Historically we have had huge sudden shipping rate increases and cargo still continues to move by sea and the public has no clue whether shipping rates are high or low at any one moment.

Inevitably the technological laggards will have to retire their ships and lay off crews, but the industry will not shrink, and the innovators will hire those crews on their improved ships.

It is a simple fact that Government standard setting and forcing capitalist compliance is extremely effective. Reagan pulled the plug on CAFE but it did not go away. Subsequent efforts did further raise the CAFE ratings and increases in national health, air quality, appliance efficiencies, car and food safety were all achieved through different government dictated performance standards.

Between 1975 and 1985 the CAFE standard doubled fuel efficiency to 27 mpg in cars in the United States. Automakers claimed that the public would not like slow, fuel efficient cars and maybe that is true, but today there are dozens of car models that have better gas mileage than 27 mpg and can outperform any pre-1975 hot rod in its slippers, and that does not even consider EV performance and efficiency.

If we would have continued the CAFE standards after 1985, there is no doubt that within a few years there would have been cars that were both high performance and fuel efficient, if the market demanded that.

Similarly, IMO can achieve massive carbon emission reductions with its Framework and politicians should stay away from it, the public should not worry about it, shipowners should shut up, and engineers should get to work.

Implement the Framework, and may the best capitalists working with the best engineers win!

Profits for the best capitalists and a huge public benefit; what else could one wish for?