The World Bank has issued a report advocating for a carbon tax in shipping which could raise US$40 billion to US$60 billion a year in the period 2025-2050, revenues that could contribute to speeding up the decarbonization of the sector as well as boosting port infrastructure, particularly in developing countries.
The 58-page report Distributing Carbon Revenues from Shipping suggests that part of the revenues should be used to support an equitable transition away from fossil fuels in least developed countries.
For that purpose, the World Bank has developed a possible distribution framework for carbon revenues from international shipping as presented below.
According to the World Bank, a smartly designed framework for the distribution of carbon revenues from a potential carbon tax in shipping can deliver on the dual goal of maximizing climate benefits and ensuring an equitable transition for countries, especially for the most vulnerable.
The report, which was published last week, comes ahead of the upcoming Marine Environment Protection Committee (MEPC) meeting at the International Maritime Organization (IMO) headquarters in London, to be held on July 3-7.
With it, the World Bank joins a growing group of nations and organizations, including the USA, France, and Denmark, advocating for the prompt introduction of a carbon levy by IMO member states.