At the recent UN International Maritime Organization meeting, there was a heated debate among countries regarding the implementation of a global levy on greenhouse gas emissions within the shipping industry. China, Argentina, and Brazil were among the countries opposing the idea, despite around 20 countries supporting a carbon tax at a summit led by French President Emmanuel Macron.
Denmark’s Minister for Development Co-operation and Global Climate Policy, Dan Jørgensen, has been a long-time advocate for a shipping levy. He believes that innovative sources of financing, such as this maritime tax, are essential for countries to effectively address climate change. Jørgensen spoke with Attracta Mooney, the FT’s climate correspondent, about the importance of increasing climate financing, transitioning away from fossil fuels, and the significance of the upcoming COP28 climate summit.
According to Jørgensen, the summit in Paris has been a positive experience, with a growing global momentum towards climate financing. He emphasizes the need for accelerated mobilization of private financing and highlights that climate financing and poverty eradication should not be viewed as conflicting goals. He expresses satisfaction with the openness towards innovative financing sources, particularly the shipping levy.
Regarding discussions about the shipping levy, Jørgensen explains that there hasn’t been a formal decision-making session with all countries involved. However, he notes the strong support for increased financing and a positive attitude towards the shipping levy as a crucial first step. He urges timely decisions to be made, emphasizing the need for a carbon-neutral shipping sector.
Jørgensen believes that a decision on the shipping levy is highly probable, despite potential disagreements on specific details. He acknowledges that agreements on the tax’s structure, revenue allocation, and other related discussions may occur later. However, he urges all parties to prioritize the broader decisions on achieving a carbon-neutral shipping sector, with a levy being the most effective economic incentive.
He stresses the need to mobilize more funds for international climate financing, highlighting the potential of a global source through the shipping levy. Jørgensen sees the upcoming World Bank meeting in Marrakech as an opportunity to push for further reforms to enable increased mobilization of funds. The forthcoming COP28 UN climate meeting in Dubai will also place financing at the core of discussions.
When asked about objections from certain countries, Jørgensen acknowledges the concerns raised by the Marshall Islands and Solomon Islands, which propose a tax of $100 per tonne of CO₂ emissions from shipping. He views these island states as allies and recognizes their advocacy for greater mitigation actions and financing for loss and damage. Finding solutions to address these concerns is crucial.
In response to President Ruto of Kenya’s proposal for a new green bank independent of the IMF and the World Bank, funded by taxes like the maritime levy and a financial transaction tax, Jørgensen expresses agreement with the notion that countries most affected by climate change should not bear the burden of additional debt to address emissions. He emphasizes the principle of “common but differentiated responsibility” and acknowledges the need for developed countries to assist developing countries in funding the necessary investments for clean energy transitions. Jørgensen mentions that Denmark already provides public grants for this purpose and suggests that reforming multilateral development banks can also help secure more funding.
In conclusion, Jørgensen recognizes the positive developments and growing momentum around climate financing at the Paris summit. He emphasizes the importance of innovative financing sources like the shipping levy and highlights the upcoming opportunities at the World Bank and COP28 meetings to further discussions on financing and climate action.
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