Pacific governments say an official UN report shows their push for a levy on all shipping emissions – with the revenues redistributed to poorer nations – is fairer, cheaper and more effective than other green options under consideration.
The report, overseen by a steering committee of 32 governments and published by the International Maritime Organisation (IMO), found that a levy would do less damage to the global economy than a standard for cleaner fuels and, if designed right, could help reduce global economic inequality.
Marshall Islands shipping negotiator Albon Ishoda said the analysis showed that a direct levy on emissions “is the fastest, cheapest and most equitable way” to decarbonise shipping, a sector that accounts for 3% of the world’s greenhouse gas pollution.
A levy would force ship owners to pay for every tonne of greenhouse gases their vessels emit, making the use of more-polluting fuels – like today’s oil-based bunker fuel – more expensive. It would incentive the use of lower-emitting fuels like ammonia, biofuels, methanol and hydrogen.
Ishoda said he now expects to see countries coalesce around an emissions levy, adding that “alternatives such as relying solely on a fuel standard could be up to twice as damaging for global GDP by 2050, with the poorest countries hit hardest”.
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But written comments on the UN Trade and Development (UNCTAD) report show that Brazil, Argentina and China disputed its findings. Latin American nations have long led opposition to an emissions levy, fearing it will harm their trade-dependent economies.
Argentinian officials noted that they were “surprised” at the conclusion that levies would lead to less economic damage in the long term while Brazil wrote that this was “nonsensical”.
Argentina said it was “policy-prescriptive and therefore unacceptable” for the report to suggest that disbursing the revenues would help developing countries more than developed ones, while China argued this aspect should not have been factored in as “the impact assessment should focus on the impact of the measure, rather than the impact after revenue distribution”.
Levy or fuel standard?
Governments have already agreed to put a price on shipping emissions as a way to reach net zero “by or around, i.e. close to 2050”. But they have not settled on exactly how to do that, instead tasking experts to study the impacts of various proposals.
One proposal – which most countries support – is a fuel standard that would see ship owners pay for emissions only above a certain level. Owners of ships emitting below this level could potentially sell licenses to those emitting above it, enabling them to continue polluting. This would incentivise shipowners to use cleaner fuels or to save fuel by sailing slower.
Some countries – like the Pacific island states and many European nations – want to combine this fuel standard with a levy, where ship owners would have to pay varying amounts based on their vessels’ total annual greenhouse gas emissions.
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Under the direction of governments, experts from UNCTAD, the World Maritime University, DNV and Starcrest Consulting Group produced four separate reports, modelling dozens of different scenarios.
UNCTAD found that any emissions-cutting scenario would push up the cost of shipping, damaging the global economy by around 0.1-0.2% by 2050. It did not model the economic benefits of how the measures would help curb climate change.
Comparing a levy to a fuel standard, the UNCTAD report concluded that “in the long run (2050), scenarios that envisage a levy have a smaller impact” on economic growth.
University College of London academic Tristan Smith, who worked on the paper, explained that the levies modelled lead to greater subsidies for zero-emission fuels and higher incentives for fuel efficiency than the proposed fuel standard. He told Climate Home that this lowers the cost of the transition and therefore the damage to economic growth.
Fairer and faster?
The report found that a fuel standard without a levy would damage the economies of developing countries – particularly small islands (SIDs) and least developed countries (LDCs) – more than developed countries because any increase in shipping costs hits the poorest hardest.
A high emissions levy of $150-300 per tonne of CO2 equivalent would be fairer, it found, broadly damaging developing countries’ economies less than developed ones, assuming that the revenues were distributed to poorer nations. Such a levy would actually boost the economies of most LDCs, it found, and damage SIDs less than the alternatives.
Consultants from Starcrest interviewed representatives of governments and business in various countries and heard concerns that economies exporting cheap, bulky goods over long distances would be badly hit by an increase in the cost of shipping. It cited Tonga’s exports of the medicinal kava plant and the US’s exports of wood chips as examples.
If green measures drive ships to slow down to save fuel, then countries that rely on exporting perishable goods to faraway destinations would suffer, Starcrest was told. Argentina’s beef and Chile’s cherry industries could be vulnerable.
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University of Sao Paulo economist Paula Pereda told Climate Home that a levy would “quickly reduce emissions”, but warned against its “potential regressive impacts, which more negatively affect poorer countries and poorer families in all countries”.
While revenue redistribution could help tackle this unfairness, it could also increase emissions from the compensated households and increase the complexity of the mechanism, she added.
“Balancing environmental benefits with social equity remains a key challenge in the implementation of carbon tax policies,” she said.
Governments will debate whether to pursue a levy or fuel standard at the next set of IMO talks in London, starting on September 30. They are aiming to have a measure in place by 2027, which means they will need to agree it at talks in April 2025.
(Reporting by Joe Lo; editing by Megan Rowling)
The post Key UN report lends weight to Pacific plan for shipping emissions levy appeared first on Climate Home News.
Key UN report lends weight to Pacific plan for shipping emissions levy
A new storm recovery charge could soon hit Georgia Power customers’ bills, as climate change drives more destructive weather across the state.
Hurricane Helene may be long over, but its costs are poised to land on Georgians’ electricity bills. After the storm killed 37 people in Georgia and caused billions in damage in September 2024, Georgia Power is seeking permission from state regulators to pass recovery costs on to customers.
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Gabrielle Dreyfus is chief scientist at the Institute for Governance and Sustainable Development, Thomas Röckmann is a professor of atmospheric physics and chemistry at Utrecht University, and Lena Höglund Isaksson is a senior research scholar at the International Institute for Applied Systems Analysis.
This March scientists and policy makers will gather near the site in Italy where methane was first identified 250 years ago to share the latest science on methane and the policy and technology steps needed to rapidly cut methane emissions. The timing is apt.
As new tools transform our understanding of methane emissions and their sources, the evidence they reveal points to a single conclusion: Human-caused methane emissions are still rising, and global action remains far too slow.
This is the central finding of the latest Global Methane Status Report. Four years into the Global Methane Pledge, which aims for a 30% cut in global emissions by 2030, the good news is that the pledge has increased mitigation ambition under national plans, which, if fully implemented, could result in the largest and most sustained decline in methane emissions since the Industrial Revolution.
The bad news is this is still short of the 30% target. The decisive question is whether governments will move quickly enough to turn that bend into the steep decline required to pump the brake on global warming.
What the data really show
Assessing progress requires comparing three benchmarks: the level of emissions today relative to 2020, the trajectory projected in 2021 before methane received significant policy focus, and the level required by 2030 to meet the pledge.
The latest data show that global methane emissions in 2025 are higher than in 2020 but not as high as previously expected. In 2021, emissions were projected to rise by about 9% between 2020 and 2030. Updated analysis places that increase closer to 5%. This change is driven by factors such as slower than expected growth in unconventional gas production between 2020 and 2024 and lower than expected waste emissions in several regions.
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This updated trajectory still does not deliver the reductions required, but it does indicate that the curve is beginning to bend. More importantly, the commitments already outlined in countries’ Nationally Determined Contributions and Methane Action Plans would, if fully implemented, produce an 8% reduction in global methane emissions between 2020 and 2030. This would turn the current increase into a sustained decline. While still insufficient to reach the Global Methane Pledge target of a 30% cut, it would represent historical progress.
Solutions are known and ready
Scientific assessments consistently show that the technical potential to meet the pledge exists. The gap lies not in technology, but in implementation.
The energy sector accounts for approximately 70% of total technical methane reduction potential between 2020 and 2030. Proven measures include recovering associated petroleum gas in oil production, regular leak detection and repair across oil and gas supply chains, and installing ventilation air oxidation technologies in underground coal mines. Many of these options are low cost or profitable. Yet current commitments would achieve only one third of the maximum technically feasible reductions in this sector.
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Agriculture and waste also provide opportunities. Rice emissions can be reduced through improved water management, low-emission hybrids and soil amendments. While innovations in technology and practices hold promise in the longer term, near-term potential in livestock is more constrained and trends in global diets may counteract gains.
Waste sector emissions had been expected to increase more rapidly, but improvements in waste management in several regions over the past two decades have moderated this rise. Long-term mitigation in this sector requires immediate investment in improved landfills and circular waste systems, as emissions from waste already deposited will persist in the short term.
New measurement tools
Methane monitoring capacity has expanded significantly. Satellite-based systems can now identify methane super-emitters. Ground-based sensors are becoming more accessible and can provide real-time data. These developments improve national inventories and can strengthen accountability.
However, policy action does not need to wait for perfect measurement. Current scientific understanding of source magnitudes and mitigation effectiveness is sufficient to achieve a 30% reduction between 2020 and 2030. Many of the largest reductions in oil, gas and coal can be delivered through binding technology standards that do not require high precision quantification of emissions.
The decisive years ahead
The next 2 years will be critical for determining whether existing commitments translate into emissions reductions consistent with the Global Methane Pledge.
Governments should prioritise adoption of an effective international methane performance standard for oil and gas, including through the EU Methane Regulation, and expand the reach of such standards through voluntary buyers’ clubs. National and regional authorities should introduce binding technology standards for oil, gas and coal to ensure that voluntary agreements are backed by legal requirements.
One approach to promoting better progress on methane is to develop a binding methane agreement, starting with the oil and gas sector, as suggested by Barbados’ PM Mia Mottley and other leaders. Countries must also address the deeper challenge of political and economic dependence on fossil fuels, which continues to slow progress. Without a dual strategy of reducing methane and deep decarbonisation, it will not be possible to meet the Paris Agreement objectives.
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The next four years will determine whether available technologies, scientific evidence and political leadership align to deliver a rapid transition toward near-zero methane energy systems, holistic and equity-based lower emission agricultural systems and circular waste management strategies that eliminate methane release. These years will also determine whether the world captures the near-term climate benefits of methane abatement or locks in higher long-term costs and risks.
The Global Methane Status Report shows that the world is beginning to change course. Delivering the sharper downward trajectory now required is a test of political will. As scientists, we have laid out the evidence. Leaders must now act on it.
The post Curbing methane is the fastest way to slow warming – but we’re off the pace appeared first on Climate Home News.
Curbing methane is the fastest way to slow warming – but we’re off the pace
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