The World Bank has released a report indicating that between $1 trillion and $3.7 trillion could be raised through “carbon pricing” by 2050.
The bank estimates that the average sum of revenues collected could range between $41 billion and $105 billion annually.
This comes after the global shipping industry agreed, in principle, to implement a carbon tax ranging from $75 to $300 per metric tonne of CO2 emissions.
The European Union has already implemented a fuel levy, and there is mounting pressure on the International Maritime Organization (IMO) to impose a tax on greenhouse gas (GHG) emissions to decarbonise the liner industry.
Nearly all stakeholders in the shipping industry have called for the revenue generated from carbon taxes to be allocated towards research and development of greener fuels and technologies for decarbonisation.
Research suggests that global carbon emissions could potentially increase by 90-130% by 2050, compared to 2008. Currently, the shipping industry accounts for approximately 3% of global GHG emissions.
Rico Salgmann, a transport consultant at the World Bank, stated that the financial institution believes a "smartly designed distribution framework for carbon revenues can accomplish the dual objectives of maximising climate benefits and ensuring an equitable transition for countries, particularly the most vulnerable."
The bank's report, Distributing Carbon Revenues from Shipping, primarily focuses on decarbonising shipping, improving maritime transport infrastructure and capacity, supporting climate goals, achieving broader development objectives, and financing the general fiscal budget.
It also examines ways to cover administrative and enforcement costs associated with measuring market-based carbon emissions.
The report suggests directing resources towards fleet upgrades and renewal, with a particular emphasis on zero-carbon engines and propulsion systems, onboard energy efficiency technologies, and research and development. Additionally, it highlights the necessity for zero-carbon bunker fuels and infrastructure support, including fuel production, storage, distribution and shore power connection.
