International Transportation Forum Wants Emissions Tax

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Published Oct 13, 2015 6:07 PM by The Maritime Executive

The International Transportation Forum (ITF) favors a carbon tax for shipping in order to curb emissions in the coming decades.

ITF, a think-tank affiliated with the Organization of Economic Cooperation and Development (OECD), has suggested a carbon tax of about $25 per ton of CO2. In addition, the ITF states that operators should aim to reduce carbon emissions by half over the next 35 years and entirely by 2080.

ITF stated in a report: “The impact on maritime trade would be marginal if the tax were set at around USD25 per tonne of CO2. The receipts of such a carbon tax could provide a substantial source of finance for the Green Climate Fund.”

Thought not everyone is pleased with the ITF’s tax proposal. The International Chamber of Shipping recently released a statement questioning a potential tax.

“This would be almost three times higher than the carbon price paid by shore based industries in developed nations, ICS said in response to a potential tax.

ICS added: “ICS emphasizes that shipping is committed to reducing CO2 and has a responsibility to contribute to the achievement of the United Nations’ climate change goals. But the U.N. Framework Convention on Climate (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 percent of global trade.”

ITF contends that such a tax would raise about $26 billion in revenue which could be used toward further financing climate mitigation projects in those developing nations.

The IMO implemented a cap on Sulphur content of fuel to a maximum of 0.1 percent in Emissions Control Areas (ECAs) to reduce Sulphur Oxide emissions on January 1. The areas currently affected are Europe (North and Baltic Seas) and North America.

In addition to an emissions tax, ITF has also called for IMO to set an absolute emissions target for the 35 years and develop an action plan in order to reach it.

“It would be odd if countries are expected to adhere to emission targets but not the shipping sector, especially since it would be impossible to apportion shipping emissions to countries,” ITF said in its report.

Click here to read the full ITF report.