The shipping industry is on the brink of a significant transformation as India, along with 62 other countries, has endorsed the world's first global carbon tax. This agreement aims to address the pressing issue of greenhouse gas emissions from the shipping sector, which contributes approximately 3% of global emissions, and was previously not accounted for in the Paris Agreement.
The agreement establishes a framework for a carbon tax that will come into effect in 2028. Starting from that year, ship owners of large ocean-going vessels will be required to either utilize cleaner fuels or face a carbon tax. This represents a crucial step towards decarbonizing the shipping industry.
The projected carbon tax will range between $100 and $380 per tonne of emissions for ships that continue using conventional fuels in 2028. This financial mechanism is expected to generate substantial revenue, potentially reaching up to $40 billion by 2030. The funds collected from this tax will be exclusively allocated to assist the shipping industry in its decarbonization efforts.
A total of 63 countries, including major players like India, China, the European Union, Norway, Singapore, South Africa, and Japan, voted in favor of this historic agreement. However, 16 nations, predominantly major oil-producing countries such as Saudi Arabia, the UAE, Russia, and Venezuela, opposed it.
Experts are optimistic about the potential impact of this agreement, projecting a possible 10% reduction in absolute emissions from the shipping sector by 2030. However, some experts argue that this target may not be sufficient to meet the International Maritime Organization's (IMO) own emissions reduction goals, which call for a 20% to 30% cut in emissions by the same year.
This groundbreaking agreement marks a pivotal moment for the shipping industry and global climate policy. By implementing a carbon tax, nations are taking a significant step towards fostering sustainable practices in shipping, ultimately aiming to mitigate climate change and protect our environment.
Q1. What is the new agreement about the shipping industry?
Answer: The agreement establishes the world's first global carbon tax on shipping, aimed at reducing greenhouse gas emissions from this sector, effective from 2028.
Q2. Why is the carbon tax important for climate action?
Answer: It addresses emissions from a sector that contributes significantly to global greenhouse gas emissions, promoting cleaner fuels and decarbonization.
Q3. How much will the carbon tax cost ship owners?
Answer: The tax is estimated to range from $100 to $380 per tonne of emissions for ships using conventional fuels starting in 2028.
Q4. What is the expected financial impact of this tax?
Answer: The carbon tax could generate up to $40 billion by 2030, which will be used to help the shipping industry transition to more sustainable practices.
Q5. Which countries supported the carbon tax agreement?
Answer: 63 countries, including India, China, and members of the EU, supported the agreement, while 16 countries opposed it, primarily oil producers.
Question 1: What is the primary aim of the global carbon tax on the shipping industry?
A) To increase shipping costs
B) To reduce greenhouse gas emissions
C) To promote oil production
D) To enhance maritime trade
Correct Answer: B
Question 2: When will the carbon tax for the shipping industry come into effect?
A) 2025
B) 2028
C) 2030
D) 2035
Correct Answer: B
Question 3: How much revenue is expected from the carbon tax by 2030?
A) $10 billion
B) $20 billion
C) $30 billion
D) $40 billion
Correct Answer: D
Question 4: Which countries voted against the carbon tax agreement?
A) India and China
B) Saudi Arabia and UAE
C) Norway and Japan
D) South Africa and Singapore
Correct Answer: B
Question 5: What percentage reduction in emissions is expected by 2030 as a result of the agreement?
A) 5%
B) 10%
C) 20%
D) 30%
Correct Answer: B
Question 6: How will the funds from the carbon tax be used?
A) To subsidize shipping companies
B) To support decarbonization efforts in the shipping industry
C) To promote fossil fuels
D) To enhance military shipping capabilities
Correct Answer: B
Question 7: Which international body set the emission reduction targets being discussed?
A) United Nations
B) International Maritime Organization (IMO)
C) World Trade Organization (WTO)
D) World Health Organization (WHO)
Correct Answer: B
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