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On the Scene
Cover Stories Series 2011
UPDATED: December 5, 2011 Web Exclusive
A Carbon Price on Shipping

International shipping is a major and rapidly growing source of greenhouse gas emissions. Oxfam and the World Wildlife Fund, two major global non-governmental organizations concerned with climate change, assert that applying a carbon price on shipping can both reduce emissions and raise funds for climate change adaptation and mitigation in developing countries. On November 29, they joined forces with the International Chamber of Shipping (which represents over 80 percent of the world merchant fleet), urging the UN Climate Conference in Durban to move forward on carbon pricing policies in shipping.

Tim Gore, Oxfam's International Policy Advisor on Climate Change, talked with Beijing Review reporter Yu Yan about the proposal.

Tim Gore (YU YAN)

Beijing Review: Can you give a brief introduction to your proposal?

Tim Gore: We apply a carbon price to shipping to reduce emissions. Part of the money collected will be used to compensate developing countries for the increase in transport costs. And the remaining revenue can be directed to the Green Climate Fund. This is our proposal.

You proposed to reduce shipping emissions through the development of market-based measures. What does "market-based measures" refer to?

There is a discussion in the International Maritime Organization, looking at market-based measures to reduce the shipping emissions. It could be a levy. And we can also do that in a way which also generates financing. We haven't decided on one scheme or another.

The critical point is how we can design a scheme which doesn't unfairly impair developing countries, and that is consistent with the principle of common but differentiated responsibilities.

According to the proposal, a significant share of the revenue collected will be used to compensate for developing countries. How big is that share?

We believe all of the money should go to the developing countries. But the money will flow to developing countries in two ways. Around 40 percent of the revenues would automatically go back to developing countries to compensate for their increase in transport costs. And we want the vast majority of the remaining 60 percent to go to the Green Climate Fund. In total $25 billion will be raised per year, of which $10 billion will go to the Green Climate Fund.

How will the money be managed?

The scheme will be implemented by the International Maritime Organization (IMO), the [UN] regulatory authority on shipping. They will design and implement the scheme. There are different options on the table for the technical design of the scheme. We leave that to the experts in the IMO.

We want the money to be collected centrally and then pass it to the Green Climate Fund, so as to make sure the Green Climate Fund established at last year's UN Climate Conference in Cancun, Mexico, will have stable revenue.

The EU is considering adopting the same emissions trading mechanism on shipping as on aviation. What's your comment on their mechanism?

Our proposal is no alternative to the EU's unilateral regional approach. The EU has implemented a unilateral regional approach to aviation, because it's not possible to reach a global agreement. And now they are planning a regional approach to shipping. So we are saying we need a global approach to shipping which is consistent with the principle of common but differentiated responsibilities.

(Reporting from Durban, South Africa)

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