From CFACT
By David Wojick
The Trump administration has thrown its full weight against a proposed net-zero shipping emissions plan about to be approved by the member countries of the UN’s International Maritime Organization (IMO). Three Cabinet secretaries have issued a warning to other countries not to approve the so-called Net Zero Framework (NZF), which is generally considered to be a carbon tax on global shipping.
See here for the text of the warning.
The IMO was supposed to pass the NZF at its October meeting, but the Trump warning had a clear effect, so that vote never happened. All they did was vote to postpone voting on the emission reduction compliance program until the next meeting. Now the fight really begins.
NZF is not actually a tax, just penalties for failing to meet agreed-on emission limits, but it is still potentially costly so call it a tax. The IMO fact sheet is here.
Basically, each ship gets an assigned cap on CO2 and other greenhouse gas emissions per unit of energy expended. The caps get progressively lower over time, heading for zero in 2050.
If a ship gets below its cap it gets “surplus unit” (SU) credits for the difference that it can sell. If it exceeds the cap a little it must buy “Tier 1 remedial units (RU)” from IMO. If it exceeds the cap a lot it can either buy SUs or Tier 2 RUs which cost about four times as much as Tier 1 RUs.
It is buying the remedial units that amounts to a carbon tax on emissions, which by some estimates will be enormous. The Trump administration said in a press release that America “unequivocally rejects this proposal before the IMO and will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists. The economic impacts from this measure could be disastrous, with some estimates forecasting global shipping costs increasing as much as 10% or more.”
Decarbonization of shipping is pretty much impossible, because it cannot be electrified. The sea lanes cannot be lined with charging stations. Refitting every ship in the world with nuclear propulsion would be even more expensive. Burning wood or corn might be even worse.
The net-zero thinkers are not known for reality, but, in this case, the greater the failure the more money they make. No wonder they like it!
Nor can the U.S. just walk away because shipping is truly global. Here is how the IMO fact sheet explains enforcement of things like NZF:
“Enforcement of all IMO regulations lies with the Member States, in their capacity as flag, port or coastal States. When a government accedes to an IMO Convention, it agrees to make it part of its own national law and to enforce it just like any other law. A Flag State must ensure that ships under its registry comply with IMO’s international rules and standards, including safety, environmental protection and labour conditions. A Port State has the right to inspect foreign ships in national ports to verify that compliance with IMO rules.”
How do foreign ports enforce NZF compliance on American ships? Or any ships for that matter. There is real potential for violence here, with a lot of money at stake.
Clearly the potential for disruption from the ill-conceived UN IMO NZF is enormous, and the fight is just beginning. Stay tuned to CFACT as this drama unfolds.
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