The urgent need to reduce shipping emissions has been thrust into the spotlight as the global shipping industry looks to governments around the world to enact taxes to encourage a reduction in carbon emissions. The strategy will be implemented alongside other initiatives to reduce emissions in the industry, such as the development of carbon-free shipping technology and the use of renewable fuels.
Shipping Industry Agrees It Must Tackle Rising Carbon Emissions
The global shipping industry has long been a major source of greenhouse gas emissions. Currently, it adds roughly 940 million tonnes of CO2into the atmosphere each year, and this figure will continue to rise if no impactful measures are taken. The shipping industry is responsible for approximately 2.5% of total global greenhouse gas emissions. If the industry were a country, it would rank sixth in the world's largest polluters, just behind Germany.
Recent studies have estimated that these figures may even rise by anything from 50-250% over the next three decades if not much changes. The industry is taking these predictions seriously as they contradict the goals of the Paris Agreement. Measures must be put in place as soon as possible to prevent the rapid increase of these figures.
In fact, to avoid the rise in shipping emissions that appears to be unavoidable in the current state of affairs, more than 90% of the world's shipping fleet has already agreed that significant steps must be taken to combat climate change. Although the shipping industry was not included in the Paris climate change agreement, it is clear that changes must be made to honor the goals of the agreement.
Introducing a “Price on Carbon”
The International Maritime Organization (IMO), a UN agency that oversees the shipping industry, has listened to the concerns and, in response, has set a target to lower greenhouse gas emissions by 2050. While the plan intends to address the predicted increase in shipping emissions, several environmental groups have criticized it for being too lax, claiming that under this plan, shipping emissions will continue to rise for many years.
Other efforts to reduce shipping emissions have previously been made, like the $5 billion fund established to support the development of carbon-free shipping technology. However, the sector now wants global governments to agree on a “price on carbon” to provide shipping companies with a financial incentive to change their operations to be more eco-friendly.
It has thus been suggested that a $100 per tone tax on greenhouse gas emissions should be implemented. However, while this may help to reduce shipping emissions, the increased costs incurred by companies who do not significantly reduce their emissions may be passed onto the customer.
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