Ahead of the IMO GHG meetings taking place this and next week, the World Bank published a new report titled ‘Distributing Carbon Revenues from Shipping’. It discusses how putting a price on carbon emissions can help reduce GHG emissions and generate revenue. Estimates show that, in shipping alone, putting a price on carbon could raise 40 to 60 billion USD each year between 2025 and 2050.
The report presents options for how this money could be put to work. It could be used to speed up decarbonisation in the shipping industry, which will require trillions of dollars in investment. Carbon revenues could finance and then accelerate shipping’s move from fossil fuels. The report finds that there is a great need for investment in zero-carbon fuel production and in maritime infrastructure – including efficient ports – that promotes decarbonisation, provides development opportunities, reduces transport costs, and builds resilience in the face of extreme global events. Reinvesting carbon revenues into port infrastructure can help lower the costs of final delivered products – including food and other essential supplies. Ultimately, reducing time in transport can help to offset the cost of a carbon levy on shipping in developing countries.
Just as importantly, the money could be used more broadly, beyond the shipping industry, to help nations and industries mitigate and adapt to climate change. Especially for countries most vulnerable to climate change, such as Small Islands Developing States (SIDS) and Least Developed Countries (LDCs), the report argues that broadening the use of revenues beyond maritime decarbonisation addresses equity concerns since very often their ability to spend within the maritime transport sector is limited. The World Bank therefore recommends that SIDS, and LDCs should get more in the way of help from carbon revenues. These countries would benefit from a dedicated portion of carbon revenues. The World Bank believes that a smartly designed distribution framework for carbon revenues can deliver on the twin goals of maximising climate benefits and ensuring an equitable transition for countries, especially for the most vulnerable.
Source: IAPH
