The Micronesian Center for Sustainable Transport (MCST) has released a critical analysis of the International Maritime Organization’s (IMO) 2023 Revised Strategy for the reduction of Greenhouse Gas (GHG) emissions from ships.
In a working paper titled “Disbursement of Revenues Generated by IMO’s Emission Reduction Measures: Is Contributing to a Just and Equitable Transition That Leaves No State Behind an Empty Slogan? How Much Should Be Spent on What by Who?” authored by Peter Nuttall, Alison Newell, Atina Schutz, Maria Sahib, Aileen Sefeti, John Fatuimoana Kautoke, John Taukäve, and Pierre-Jean Bordahandy, MCST highlights the importance of directing revenues to assist the most climate vulnerable nations.
The authors note the urgent need for IMO member states to reach an agreement on the technical and economic elements required to reduce GHG emissions by April 2025. The proposed measures include financial contributions from a GHG levy, non-compliance penalties, and emissions credit or compliance trading. “The most ambitious proposal, sponsored by several Pacific Small Island Developing States (SIDS) and Belize, sets an initial price on GHG of $150/tonne CO2-equivalent, potentially generating an average of $60-90 billion annually.”
The paper points out the lack of specificity on how these revenues will be utilized. Current proposals range from rewarding the highest performing ships to prioritizing investment in the needs of the global south, particularly the climate most vulnerable states. The IMO’s Marine Environment Protection Committee (MEPC) has yet to decide on the revenue generation, disbursement, and management.
The paper emphasizes that the climate most vulnerable states are in a dire situation, facing significant challenges in financing their own maritime and critical sector transitions without substantial external investment. “These states cannot survive a global warming scenario that is not commensurate with the 1.5°C climate threshold and are already paying the highest and earliest costs.”
Since 2015, a small cohort of Pacific States pressing for a 1.5°C agenda has now evolved into a broad and growing geographic alliance of SIDS and least developed countries. A balance is required between incentivizing the fleet to mitigate emissions and compensation for disproportionate impacts, reparation for environmental liability, or enabling a just and equitable transition for all.
The analysis concludes by stressing that a solution where the majority of revenues are recycled internally within the industry through various trading mechanisms cannot deliver a durable or equitable solution for all states. It calls on the IMO to ensure that the commitment to a just and equitable transition does not become an empty slogan.
Source: Hellenic Shipping News
