Wave of Caribbean nations shift balance on a global carbon levy on shipping at UN

Small Island states have ramped up pressure for the adoption of a global carbon price on international shipping, in this week’s IMO Session (ISWG-GHG-16).

From this week’s interventions at the IMO, it is apparent that:

• 31 countries across the Pacific and the Caribbean, as well as from Africa, supported a price on all GHG emissions from shipping, including 17 countries backing explicitly the highest ambition proposal for a $150 levy/tonne of GHG emissions
• 17 countries, including China and countries in South America, continue to favour a much weaker and complicated mechanism that serves as a fee for non-compliance
• Many countries remain undecided

This represents a huge increase in numbers of countries supporting the emission price since last year, while the opposing group remains roughly stable.

The negotiations are set to continue at the 81st Marine Environment Protection Committee Meeting (MEPC 81) next week, 15-22 March.

Major Lloyd Jones, Chairman of the Belize Port Authority and Head of Delegation for Belize: “While we acknowledge the challenges in decarbonization, it is crucial to remember that the core issue at hand is climate change and the implementation of the Revised IMO GHG Strategy. The 2023 Strategy rests on three pillars: energy transition, an incentivization program to drive this transition, and a Just and Equitable Transition. If any of these pillars are weakened or worse, collapse, our ability to achieve the Strategy’s ambitions is significantly jeopardized. The member states of the Caribbean region have made it clear that the decisions made here must not undermine these three pillars of the strategy and should ensure that no one is left behind in the energy transition.”

H. E. Albon Ishoda, Presidential Special Envoy for Maritime Decarbonization: “As I speak, my homeland is currently experiencing high surge and severe inundation during this season of King tide and we see it getting worse each and every year. This is a serious matter that needs to be addressed and attended to now without any further delay. And the core reason why climate vulnerable nations like mine, along with Belize, Fiji, Kiribati, Nauru, Solomon Islands, Tonga, Tuvalu and Vanuatu have proposed an initial price of $150 per tonne of GHG emissions from the international shipping is simply straightforward – we need to ensure a 1.5-aligned energy transition as demanded by Pacific leaders under the Paris accord and since the late Tony de Brum first joined IMO negotiations in 2015. The revenues raised through this carbon price will be a by-product that will be reinvested in the shipping industry to trigger research, development and deployment into zero-emission maritime technologies and to address climate mitigation efforts. This proposal also provides an assurance for equitable transition for SIDS and LDCs by simultaneously dealing with shipping’s dirty past and by ensuring that no one is left behind.”

Ana Laranjeira, Shipping Manager, Opportunity Green: “”As negotiations unfold on the regulatory measures to be adopted to reduce shipping emissions this week, we’ve seen a much welcome increase in the participation of the Caribbean, which brought a new burst of high ambition to the IMO discussions alongside the long-standing Pacific Island states delegations. Not only is it important to keep this momentum for the continuing negotiations on the measures next week, which may include a levy on shipping emissions, but it’s also absolutely critical to support the attendance of more climate vulnerable countries in these negotiations. Securing a just and equitable transition of the shipping sector starts with ensuring the fairness of the decision-making process.”

John Maggs, President, Clean Shipping Coalition: “It’s uplifting to see Pacific and Caribbean countries taking charge at the IMO this week. After all, they face the worst of the climate crisis, and have put forward their own proposal for an emission price of $150/tonne GHG that is critical for solving shipping climate impacts in a way that is fair and equitable to all. The other elements must include ramping up of energy efficiency as well as new zero-GHG fuels & technologies.”

Panos Spiliotis, Transport Senior Manager and IMO delegation lead, Environmental Defense Fund: “Delegates at the International Maritime Organization have the unique opportunity to climate-proof global trade by decarbonizing the shipping industry. A global greenhouse gas pricing mechanism is a central pillar of that ambition, and this week showed that the international community – including many developing countries and small island states – are leading the way. As we head into further talks next week, I’m hopeful more countries will support measures that fully deliver on the IMO’s 2023 Strategy.”

The IMO agreed to adopt some form of emission price in 2025, as part of its Revised Strategy adopted last year. The goal is to help close the price gap between fossil fuels and green energy, and use the revenue generated in this process for an equitable transition.

The mechanism is championed by the Pacific Island states, with a fresh proposal for a GHG price, e.g. a levy, of $150/tonne of GHG put forward by: Belize, Fiji, Kiribati, Marshall Islands, Nauru, Solomon Islands, Tonga, Tuvalu and Vanuatu. In the IMO plenary this week, a framework for a GHG levy along the lines of the Pacific proposal was also supported by: Barbados, Grenada, Tuvalu, St Vincent and Grenadines, Trinidad & Tobago, Jamaica, St Kitts and Nevis, New Zealand.

The EU and Canada have each also submitted their own proposals for emission pricing ahead of the negotiations, indicating their support for the mechanism as a whole.

Emission pricing is negotiated as part of a ‘basket’ of different measures as an ‘economic measure’, intended to deliver emission cuts agreed last year: 30% by 2030, 80% by 2040, to reach zero by 2050. The basket also includes a ‘technical measure’ (green energy standard/mandate) to incentivise the use of clean energy on ships.
Source: GSCC (Global Strategic Communications Council)