The International Maritime Organization (IMO) held a meeting in London on Friday at which member nations agreed to impose the world’s first global carbon tax, a fee of $380 per metric ton on “greenhouse gases” emitted by ships up to a certain limit and $100 per ton beyond that.
The IMO estimated the new tax would bring about $10 billion per year into the organization’s “net zero fund” for green energy transitions. The limit on untaxed greenhouse gas emissions is scheduled to reduce over the years, beginning in 2027 and ending with “net zero” around 2050.
The IMO meeting also established an “emissions control area” in the northeastern Atlantic, where ships would be required to observe tougher regulations on carbon emissions. Most shipping traffic between the U.S. and Europe would pass through this control zone.
The carbon tax was a “consensus” agreement that did not seem to please anyone. Environmentalists predictably railed that the tax was too low, so shipping companies would be more likely to pay it than reduce their emissions dramatically. The more optimistic environmental groups hoped the relatively modest current tax would be a foot in the door for more draconian policies down the line.
“By approving a global fuel standard and greenhouse gas pricing mechanism, the International Maritime Organization took a crucial step to reduce climate impacts from shipping,” said Natacha Stamatiou of the Environmental Defense Fund.