MCST has completed initial research of carbon pricing options under the IMO GHG emissions reduction Roadmap to provide guidance to Pacific high ambition delegations participating in these negotiations. This is the first such analysis undertaken through a Pacific lens.
Putting a price on shipping carbon emission is likely one of the most effective and contentious matters for IMO to now negotiate. There is lot at stake for Pacific States. Shipping emissions continue to grow and trend upwards. A 1.5oC agenda requires them to plateau now and sharply decline to zero before 2050. An ambitious carbon tax or levy can assist by a. reducing the price differential between fossil fuel and non-carbon alternatives, subsidizing in sector research and development (including specific research targeting the shipping needs of SIDS and LDCs), and b. providing compensation to the climate vulnerable from a punitive tax on the GHG pollution shipping causes.
The research recommends implementing an immediate levy of $250/tonne of fuel oil on all ship bunker, reviewed upward every 5 years. Such a tax could generate more than $60 billion p.a. with the majority for compensation via direct ship contributions to the Green Climate Fund and a lesser amount administered under IMO auspices for subsiding research, development and deployment of new technologies and fuel across the shipping sector.