December 13, 2010
Cancun may bring tax on ship fuel nearer
International shipping may be a step closer to having to pay a tax on fuel to some yet-to-be established international entity.
Although the UN Climate Change Conference that recently concluded in Cancun, Mexico, reached no specific agreements on the international transportation sector, IMO Secretary General Efthimios E. Mitropoulos apparently sees it as sending a green light for IMO to pursue a so-called "market mechanism" to reduce Greenhouse Gas Emissions from shipping.
According to an IMO statement, the Cancun conference "noted the progress made by the International Maritime Organization (IMO) on its work plan to limit or reduce the emissions of greenhouse gases from international shipping" and invited IMO "to continue informing future Conferences and their subsidiary bodies of the Organization's progress on this issue."
Commenting on the outcome of the Cancun Conference, IMO Secretary-General Efthimios E. Mitropoulos stated that, in his view, "the Conference should, with good reason, be considered to be a success overall as it was able, under the exemplary leadership of the Mexican Presidency, to move forward several of the items on its agenda, building on the positive outcomes of the Copenhagen Conference of 2009 - in particular, through agreeing on enhanced adaptation and mitigation actions, on the issue of climate change financing to give effect to the relevant provisions of the Copenhagen Accord, and through the establishment of the Green Climate Fund."
Mr. Mitropoulos said that "to the positives of the outcome of the Conference, as far as IMO is concerned, should be added the suggestion that, within efforts aimed at raising climate change financing through the international transport sector, further work on market-based measures should be taken forward in IMO and the International Civil Aviation Organization."
"Market based measures" is, essentially, a euphemism for a tax on fuel. The general idea among those advocating this approach is that the proceeds of this levy should then be distributed in a way that would promote reduction of GHG. Critics have problems with issues of how the money would be collected, who would have charge of it, who would decide how it would be distributed and, not least, how much would be wasted in the bureaucratic process.