Ralph Regenvanu is Vanuatu’s Special Envoy for Climate Change and Environment.
There are less than two months left for governments to deliver likely one the biggest climate deals of the year: the world’s first universal emission price on a globally polluting sector – the international shipping industry.
In 2023, the 176 member states at the UN’s maritime regulator, the International Maritime Organization (IMO), agreed on a historic target to transition shipping to zero emissions by 2050, in a way that is fair and equitable.
Pricing the sector’s one billion tonnes of annual emissions – around 3% of all global emissions – is the best way to deliver this critical commitment, while supporting the most climate-vulnerable countries, such as mine, in the process. The IMO meets again for interim discussions on February 17-21, with the goal of finalising this important policy in April this year, so that it can take effect in 2027.
Just this January we saw a fresh wave of support for the future carbon price to be in the form of a levy, led by 49 countries across the Pacific, Africa, Europe, the Caribbean and Asia, which only reaffirms the growing political momentum behind this evidence-based policy for shipping.
With most of the world’s biggest shipping powers, like Panama, Liberia, Greece and Japan, now firmly on board for a levy, the IMO has what it needs to make it a success. The next, crucial step from now until April is making sure that the design of the future policy – the price, scope and revenue distribution – is ambitious and fit for purpose.
Support grows for global tax on shipping emissions to fund climate action
A carbon levy would incentivise the clean energy transition in the shipping industry and provide the funding needed for it to be equitable. The World Bank estimates that around $60 billion could be generated a year, based on a price of $100 per tonne of CO2e (carbon dioxide equivalent). It would be more with the $150 levy we advocate for.
Adopting such a levy means the IMO can succeed where decades of COP meetings have failed: translating realistic ambitions into binding measures.
Last year gave us a terrifying preview of climate change-driven disruptions and destruction around the world, but especially in countries that already face the highest costs and burden of climate change. The IMO levy revenue could not come at a better time to help alleviate this pressure, provided that it is distributed strategically.
Global South countries, and particularly the most remote and climate vulnerable, could finance new technology and renewable energy production, as well as improve resilience to the climate change caused in no small part by international shipping. Many of these countries, especially in Africa and Latin America, have immense renewable energy potential, which could supply the future zero-emission energy for shipping while also addressing domestic clean electricity needs.
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The world’s leading economists are clear that the clean transition in shipping will cost money no matter what, but that a levy is the best way to keep these costs as low as possible. Research commissioned by the IMO to assess the impact of measures proposed by member states draws the same conclusions.
If we don’t act now, we will face a much higher bill down the line. Some estimate that climate inaction could cost around $38 trillion in 2049, a bill that the Global South cannot – and should not – pick up.
The science is clear, and our proposals are detailed and mature. The stage is set for countries to restore hope and faith in multilateralism, global cooperation and climate action. Our countries have the political will to deliver. All eyes on the IMO now.
