Agreeing With Climate Campaigners, IMF Paper Calls for Carbon Tax on Aviation, Shipping

Slap a carbon tax on international shipping and aviation. It's an action advocated by climate campaigners, and now it's being suggested in new analysis paper from the International Monetary Fund (IMF) as well.

Those sectors account for about four percent of global CO2 emissions, the paper, After Paris: Fiscal, Macroeconomic, and Financial Implications of Climate Change (pdf) authored by IMF staffers, states. Yet the UN climate deal reached last month in the French capital, to which the paper refers, left them out--an omission that could have provided billions in climate finance.

Oscar Reyes, a climate activist and research fellow at the Institute for Policy Studies, outlined this as one of the problems with outcome of the climate talks known as COP21:

Carbon emissions from international transportation already have as much climate impact as those from Germany or South Korea. And it's going to get worse: Emissions from international flights are on course to triple by 2050, and shipping emissions set to quadruple.

But for some reason, that pollution doesn't count as greenhouse gas emissions, according to the Paris Agreement.

That's scandalous, but sadly predictable. A similar hole was worked into the Kyoto Protocol, which gave responsibility for emissions cuts in those sectors to the International Civil Aviation Organization and the International Maritime Organization, respectively. In the 18 years since Kyoto, those bodies have shown themselves incapable of taking meaningful action.

"Two major obstacles stand in the way of resolving emissions from international shipping and aviation," Julian Spector wrote at The Atlantic in December. "The first is procedural: Those industries are not bound by the Paris climate deal. The second is practical: The world currently lacks a promising technology to replace carbon-based propulsion systems, as well as a promising alternative to carbon-based fuel."

And now, as CO2 levels continue to rise and fuel further climate change, corporations are essentially allowed to contribute to the problem without repercussions, the paper states. "At the heart of the climate change problem is an externality: firms and households are not charged for the environmental consequences of their greenhouse gases from fossil fuels and other sources. This means that establishing a proper charge on emissions--that is, removing the implicit subsidy from the failure to charge for environmental costs--has a central role."

Therefore, it continues, putting a tax on carbon "should be front and center" in the goal to reduce carbon emissions.

Specifically, the paper states, "Substantial amounts could also be raised from charges on international aviation and maritime fuels. These fuels are a growing source of emissions, are underpriced, and charges would exploit a tax base not naturally belonging to national governments."

"A global $30 per ton CO2 charge on these fuels could have raised about $25 billion for climate finance in 2014, even after compensation for developing countries," the researchers state.