Us Mounts New Bid To Block Shipping Carbon Tax

The United States is continuing its efforts to scupper a global carbon tax on shipping by lobbying other countries over the costs that measure would impose.

The Trump administration has been circulating flyers at this week’s gathering of the International Maritime Organization. One person with knowledge of the talks, granted anonymity in order to speak candidly, described the content as a “skewed” economic analysis of the impact on certain countries.

The flyers, confirmed by two other people familiar with the talks who were granted anonymity to avoid retribution, outline the projected costs of implementing a proposed carbon tax on shipping pollution. One flyer, shared with POLITICO, shows that trade costs for one middle-income country for complying with the levy could amount to hundreds of millions of dollars annually.

Shipowners are expected to pass those costs on through higher freight rates “directly increasing the costs of trade for all importing and exporting nations,” that flyer says.

Attacked by Trump

Members of the U.N. shipping body are gathering for talks this week in London to discuss a framework aimed at curbing carbon pollution from shipping.

President Donald Trump has personally assailed those efforts, and his administration’s sustained campaign against a tax forced the IMO to delay a vote on the measures last October.

The head of the U.S. delegation suggested last week that there was no hope for the so-called Net Zero Framework if and when it was brought up for a vote.

The Net Zero Framework calls for a carbon-intensity standard that would become stricter over time, encouraging industry to switch from fossil fuels to lower-emission alternatives. Ships that don’t meet the standard would need to pay a fee, which would then be used to help fund the shift to greener fuels and support developing countries.

The European Union, Kenya and other nations say they support the embattled measure and plan to defend them at this week’s talks.

‘Fundamental flaws’

The data being circulated through the halls of the IMO is at odds with prevailing analyses and ignores the benefits that would come from implementing the framework, experts said.

James Stewart, a research fellow in the data analytics of transport at the UCL Energy Institute, said he was able to reverse-engineer the U.S. methodology and had found “fundamental flaws” in how the flyers derived their estimates.

“Whilst there are a number of different issues with the approach taken, the most significant is in its overestimation of the contribution of fuel cost to total trade costs,” Stewart said, adding: “The error over-inflates compliance cost estimates and thereby overstates the NZF’s impact to a large extent.”

“This isn’t credible analysis, it’s a calculated exaggeration designed to scare members,” said Felix Klann, shipping policy officer at Transport & Environment. Klann said the IMO already provides robust data on transition costs and accused Washington of “bad-faith miscalculation and fearmongering to protect fossil fuel interests.”

Em Fenton, senior director of climate diplomacy at the NGO Opportunity Green, said the “renewed push from the U.S. to undermine a hard-fought multilateral agreement comes as no surprise.”

Alternatives to the Net Zero Framework proposed at the IMO meeting “offer insignificant climate benefits and are inherently unjust and inequitable,” they added.

The White House and U.S. State Department did not immediately respond to a request for comment.