In a defining submission ahead of IMO's crunch 12th Inter-Sessional Working Group on GHG emissions in May, the sponsors call for the massive revenues that will result from a GHG price on shipping, to finance an equitable transition that leaves no country behind.
The Marshall Islands, Solomon Islands and Tuvalu, the most climate vulnerable nations on earth, are spearheading a drive to raise ambition at the International Maritime Organisation and ensure the resulting shift to non-emitting technologies and fuel benefits all. In 2020, RMI and the Solomon Islands proposed a GHG levy with an entry level price of $100 GHG-equivalent. Since then, other coalitions have proposed other market-based measures, including different levies and variations of emission trading schemes.
There is now general agreement a strong carbon price and market signal is essential if shipping is to rise to the 1.5-degree challenge. At ISWG-12 in May, member states will finally begin to seriously negotiate the future shipping market-based measure. For it to have any value in keeping global warming below a 1.5-degree temperature threshold, the measure will need to send an unequivocal signal that shipping is decarbonising now and will be fully GHG free by no later than 2050. If the market does not respond adequately, a command measure, such as a stringent fuel standard, will be also be required. Anything less is simply playing around the edges of what is needed to save the climate vulnerable countries from the current existential threat.
The scale of the market-based measure now needed will generate greater revenues than is currently required by the shipping sector to decarbonise. The World Bank is conservatively estimating that the revenues generated could be in the order of $60 billion p.a. initially. This submission from the Pacific calls for an "Equitable Transition" to be the basis for determining the allocation of such revenues among IMO member states.