New Delhi: In a landmark move, India joined 62 other countries in voting for the world's first global carbon tax on the shipping industry. The vote was held at the International Maritime Organization (IMO) headquarters in London after a week of intense negotiations. This marks the first time an entire global industry has been subjected to a coordinated carbon pricing mechanism.
Tax Targets Emissions, Starts 2028
The carbon tax is set to come into effect in 2028. Ships will either have to switch to low-emission fuels or pay a levy based on the amount and intensity of their emissions. The pricing framework includes charges of up to USD 380 per tonne for the most polluting emissions and USD 100 per tonne for others exceeding set thresholds.
USD 40 Billion in Revenue Expected by 2030
The initiative could generate up to USD 40 billion by 2030, which will be ring-fenced for decarbonising the maritime sector. However, none of the revenue will be allocated to broader climate finance goals like adaptation or loss and damage funding for vulnerable nations.
Developing Nations Disappointed by Outcome
Despite the breakthrough, several developing and climate-vulnerable countries expressed disappointment. Over 60 nations from the Pacific, Caribbean, Africa, and Central America had lobbied for a portion of the funds to be directed toward climate adaptation and recovery. Tuvalu and Vanuatu criticised the deal’s lack of equity and transparency.
Opposition and Absences Noted
Oil-producing countries such as Saudi Arabia, Russia, Venezuela, and the UAE opposed the move. The United States delegation did not participate in the negotiations and was absent during the final vote, drawing criticism from environmental groups and island nations.
Limited Emission Impact, Say Experts
The IMO estimates the tax will reduce emissions by only 10 per cent by 2030, far below its own goal of a 20 per cent cut. Environmental experts and some negotiators believe the tax lacks ambition and fails to align the shipping sector with the Paris Agreement's 1.5°C target.
Next Steps and Ongoing Debate
Although a basic framework has been agreed upon, key technical aspects—such as implementation mechanisms and revenue distribution—are yet to be finalised. Formal adoption is scheduled for October 2025. Advocacy for a more equitable and effective system continues.
(With PTI Inputs)
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