Despite efforts by the United States to undermine the initiative, on May 1 the world’s maritime nations preserved a plan to adopt the first global carbon fee on shipping.
Concluding a week-long meeting at International Maritime Organization (IMO) headquarters in London, the member nations agreed to keep working on its plan with a goal of adopting global regulations based on what the IMO calls a “Net-zero Framework.”
However, the organization also agreed to continue discussing alternative proposals and to entertain new ones, which could change the plan substantially. A number of countries submitted alternative proposals and suggested changes, saying that those should still be on the table, for inclusive, constructive negotiations.
Australia and others expressed concern, The Associated Press reported, that continuing to discuss alternatives would set the process back, when the impacts of climate change are being felt worldwide and the shipping industry is calling for certainty now to make investments in green technologies.
As the meeting closed, IMO Secretary-General Arsenio Dominguez said, “We kind of are back on track,” while urging delegates to rebuild trust and continue talking to one another.
Em Fenton, of the U.K.-based climate change nonprofit Opportunity Green, said the framework survived, with a majority of countries supporting it, but asserted, “Survival is not a victory, and we cannot end up in a cycle of open-ended negotiations. We must now look forward to moving toward adoption of the framework later this year in a way that maintains urgency and ambition, and delivers justice and equity for countries on the front lines of climate impacts.”
The regulations would establish a pricing system that would impose fees for every ton of greenhouse gases emitted by ships above allowable limits, in what is effectively the first global tax on greenhouse gas emissions. The U.S., Russia, and Saudi Arabia are among those that strongly oppose a fee.
After the IMO adjourned, State Department spokesman Tommy Pigott said, “The United States remains strongly opposed to the Net-Zero Framework, a fundamentally flawed proposal that would have imposed a global carbon tax on American consumers and our shipping and energy industries.”
Experts told Politico that the data that the U.S. distributed at the meeting to stymie the carbon tax is at odds with prevailing analyses and ignores the benefits that would come from implementing the framework. James Stewart, a research fellow in the data analytics of transport at the UCL Energy Institute, said he was able to reverse-engineer the U.S. methodology and had found “fundamental flaws” in how flyers distributed by the U.S. derived the estimates.
“Whilst there are a number of different issues with the approach taken, the most significant is in its overestimation of the contribution of fuel cost to total trade costs,” Stewart said, adding, “The error over-inflates compliance cost estimates and thereby overstates the NZF’s impact to a large extent.”
“This isn’t credible analysis, it’s a calculated exaggeration designed to scare members,” said Felix Klann, shipping policy officer at Transport & Environment. Klann said the IMO already provides robust data on transition costs and accused Washington of “bad-faith miscalculation and fearmongering to protect fossil fuel interests.”
Under the Net-zero Framework, the fees collected would go into an IMO fund to invest in fuels and technologies needed to transition to green shipping, reward low-emission ships and support developing countries so they aren’t left behind with dirty fuels and old ships.
The IMO set a target for the sector to reach net-zero greenhouse gas emissions by about 2050, and has committed to ensuring that fuels with zero or near-zero emissions are used more widely. Large ships last about 25 years, so the industry would need to make changes and investments now to reach the goal around 2050. The International Chamber of Shipping, which represents more than 80 percent of the world’s merchant fleet, has advocated adoption of the regulations.
IMO nations agreed on the Net-zero Framework last year. Delegates met in October to adopt it, a step that was widely expected to be a formality. The U.S., with trade threats from President Donald Trump, and support from Saudi Arabia and others, derailed the meeting. Delegates decided to postpone the decision by a year and adjourn.