Shipping fights proposed $26 billion a year CO2 tax

There will be around 50,000 participants at COP 21, some of them none to friendly to shipping There will be around 50,000 participants at COP 21, some of them none to friendly to shipping UNFCCC

OCTOBER 13, 2015 — A comparative handful of shipping industry advocates will be among the 50,000 participants, including 25,000 official delegates, expected to take part at the UN Conference on Climate Change (COP21) being held in Paris November 30 through December 11 under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC).

 

The aim of COP 21 is to achieve a new international agreement on the climate, applicable to all countries, with the aim of keeping global warming below 2°C. This will mean a big reduction in Greenhouse Gas (GHG) emissions. International shipping is a major generator of GHG and IMO, the UN agency that covers shipping, has been working steadily on measures to reduce them.

At COP 21, however, shipping will be in the cross-hairs of any number of interests that want to see it cut GHG even further and that will be pushing for various tough measures to see that this happens.

Even before COP 21 gets underway, an OECD think tank called the International Transport Forum has produced a policy brief calling for shipping to pay a carbon tax of around $25 per ton of CO2 generated. The policy brief doesn't get into how the CO2 emissions would be measured or the tax collected, but it does suggest that the considerable revenues generated (around $26 billion a year) could go to the Green Climate Fund, which has been set up to finance climate mitigation projects in developing countries.

The International Chamber of Shipping (ICS), argues that the $25 a ton suggested by the International Transport Forum would be almost three times higher than the carbon price paid by shore based industries in developed nations. About 70% of the world merchant fleet is registered in UNFCCC "non-Annex I" developing countries, and maritime trade is of vital benefit to rich and emerging economies alike.

ICS emphasizes that shipping is committed to reducing CO2 and has a responsibility to contribute to the achievement of the United Nations 2°C climate change goal. But the UNFCCC recognizes that developed and developing nations should accept differing commitments, and shipping is no different, especially in view of its vital role in the movement of about 90% of global trade.

While China and India, for example, have already made positive CO2 reduction commitments to COP 21, says ICS, these will not deliver absolute CO2 reductions for several years. Some richer nations, however, consistent with the UNFCCC CBDR principle, have made more ambitious commitments. Shipping meanwhile has already reduced its total CO2 emissions by more than 10% (2007- 2012) and CO2 per tonne-mile by around 20% (2005 - 2015). It is therefore on course for carbon neutral growth.

"While shipping may currently have CO2 emissions comparable to a major OECD economy, it is inappropriate for the ITF to propose that the industry should be treated like an OECD economy," said ICS Secretary General, Peter Hinchliffe.

The position of ICS remains that if IMO Member States should decide to adopt a shipping MBM (Market Based Measure) , the industry's clear preference is for a fuel levy, rather than an emissions trading scheme or other complex alternatives that would distort global shipping markets. However, if a levy was developed by IMO, ICS believes that any money collected should be proportionate to international shipping's share of the world's total CO2 emissions (2.2% in 2012 compared to 2.8% in 2007), not the $26 billion dollars a year that a $25 per ton CO2 tax would raise.

Read the ITF Policy Brief HERE

Read the full ICS response HEREMBM

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