Monday, 26 September 2011

NGOs want shipping to pay carbon tax

Oxfam, the international confederation of NGO's and the World Wide Fund for Nature (WWF) have published a joint report saying that shipping should pay a 'carbon tax' to offset the estimated 3% of global emissions it generates. The funds thus collected could go to the UN's Green Climate Fund (GCF), they say, pointing out that this would be easier to do than to wait for governments to budget direct contributions to the GCF. “The most promising option in the near term is to raise finance from international shipping,” they said.

The move by the NGOs is seen as a response to fallout of last years Cancun summit, where countries agreed to $100 billion dollars funding for the GCF without any agreement on how the money would be forthcoming. The NGOs now say that France, Germany and Mexico support the carbon tax and “many players in the shipping industry are calling for a carbon price to be set”.

 The two widely respected organisations claim that a “carbon price” of $25 per tonne would increase bunker costs by around 10% and cost the shipping industry approximately $25bn a year, equivalent to around 0.2% of the total value of global trade. “This is likely to have a marginal impact on global patterns of trade, not least when seen in the context of much larger changes in bunker fuel prices and freight rates over the past two decades,” the report adds.

The report agrees that the IMO's EEDI- the Emergency Efficiency Design Index- is a useful "first step," but Oxfam and the WWF nonetheless want their tax recommendations to be put on the agenda in Durban at the end of this year when the 17th UN Framework Convention on Climate Change meets. They say that a carbon tax "would drive significant maritime emissions cuts.”

 “Setting a carbon price for ships – even one starting at a moderate level – sends the clearest signal to shipowners and operators that they must internalise their carbon costs in both the designs and operations of their ships,” the report says.

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