Business Essentials for Professionals


The First-Ever Worldwide Carbon Fee Is Getting Closer To Becoming A Reality

The First-Ever Worldwide Carbon Fee Is Getting Closer To Becoming A Reality
Following two weeks of discussions at the UN shipping agency in London, most nations came out in favour of the world's first-ever global carbon levy on Friday.
The most recent round of talks by the International Maritime Organisation focused on how to proceed with regulating the shipping sector's climate change, which contributes around 3% of the world's carbon emissions.
A uniform greenhouse gas price has received support from 34 nations, including both high- and low-income governments. This represents a notable increase in support from the final round of negotiations in 2023.
Campaigners stated that the legislation now seemed likely to be implemented by the IMO next year, attributing the growing momentum for the policy to backing from Caribbean Island states.
The world is about to impose the first global emissions pricing, but the effectiveness of the policy depends on how well-received it is by individual nations.
Following the agreement on a new greenhouse gas policy by maritime nations in July of last year, the most recent round of negotiations marked the first convention of the IMO. Supported by 175 nations, the updated policy aims to reduce shipping emissions by 30% by 2030, at least 70% by 2040, and reach net zero by the middle of the century.
In order to assist close the price difference between fossil fuels and renewable energy sources, the IMO committed to implementing an emissions price in 2025. The proceeds from the price would be used to finance an equitable transition.
On the other hand, there are also plans to include a possible tax in conjunction with other policies. At least 14 nations are still in support of this strategy.
“The UN is on the edge of adopting the world’s first-ever global emissions price, but the policy will only be as successful as countries make it to be,” said Sandra Chiri, shipping emissions international outreach manager at the Ocean Conservancy, a U.S.-based advocacy group.
“The March talks at the IMO gave us hope that a clear majority of countries — those in the Caribbean, the Pacific, Africa, but also the EU and Canada — have seen the huge opportunity of pricing shipping emissions for the industry’s clean transition and for making sure that all developing countries are part of and benefit from it.”
In a statement, Chiri expressed sadness at the efforts of a "persistent but small minority" to weaken the idea.
Over 90% of all trade is carried out by ships, making the shipping industry one of the most difficult to decarbonise. This is partially because ships use a significant quantity of filthy fossil fuels annually.
Caribbean island republics like Barbados, Jamaica, and Grenada, as well as Pacific island states like Fiji, the Marshall Islands, and Vanuatu, are among the leading proponents of a worldwide greenhouse gas emissions tax on the shipping sector.
During the negotiations, Belize and a few Pacific Island states proposed a $150 per tonne carbon tax, which proponents claim is the "most ambitious proposal on the table."
A drive to pair an international emissions standard for maritime fuel with a fee on shipping emissions is one of the other possibilities.
“This week’s negotiations at the International Maritime Organization were successful in advancing talks to climate-proof global trade,” said Panos Spiliotis, EU transport senior manager for global shipping at the Environmental Defense Fund.
“With growing support for a universal greenhouse gas price, country delegates must now develop the right policy details to incentivize shipping decarbonization.”
The IMO's delegates are anticipated to meet again in the autumn.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc