link to - PAPER ON POTENTIAL REVENUES FROM INTERNATIONAL MARITIME AND AVIATION SECTOR POLICY MEASURES

Disclaimer: This paper is the result of the analysis carried out by a sub-group within the AGF. However, the paper does not purport to represent the views or the official policy of any member of the AGF.

Context and Summary

This paper is part of the AGF’s exploration of potential sources of revenue that may be used to enable and support climate change action in developing countries. Under the Copenhagen Accord Parties agreed to the goal of mobilizing up to US$100 billion by 2020, from a variety of sources.
Currently the environmental externality associated with emissions from fossil fuel use in both the international maritime and aviation sectors is under-priced at a global level. In 2007, greenhouse gas emissions from international shipping represented around 1.7% of world emissions, while aviation emissions represented around 0.8%, these shares are expected to rise in coming years. 1 Policy measures which appropriately price this externality could deliver environmental and net social benefits whilst also raising revenues which could be made available to enable and support climate change action in developing countries.
This paper canvases three possible generic policy constructs— an emissions trading scheme (ETS), a fuel levy and an aviation ticket tax — that may be used to raise revenue whilst also attempting to target the externality. The paper makes broad qualitative assessments of the policies against the AGF’s criteria, and also outlines some quantitative analysis of the policies’ revenue potential and their effect on the pattern of trade.
It is important to note that this paper does not seek to provide a comprehensive examination of all possible policy measures or related issues in this sphere. Nor should it be seen as pre-empting or superseding consideration of such measures in appropriate venues. Rather it has instead been framed to facilitate a broad internal discussion of the major issues related to this topic within the advisory group.
This paper acknowledges the significant and ongoing efforts of the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO) in working to build an international consensus on addressing their respective sector’s CO2 and other emissions. While an agreement on adoption of comprehensive control measures has yet to be reached, this paper builds on information publicly available through both organizations, including their invaluable internal discussions on similar policy measures. Both organizations will be informed of the AGF process and progress will be communicated to them.


1) This is a conservative estimate, with some estimates suggesting combined emissions could represent up to 7% of the total global CO2 emissions. The figures are based on an IMO estimate for international maritime emissions of 870Mt (2009 IMO GHG Study), an IEA estimate of emissions from international aviation of 391Mt (IEA CO 2 emissions from fossil fuel combustion, 2009 edition) and assumes global anthropogenic emissions of 50 Gt in 2007, a figure which is consistent with the IPCC 4th Assessment Report.

Complete Report at:
http://www.un.org/wcm/webdav/site/climatechange/shared/Documents/AGF_reports/Work_Stream_2_International_Transport.pdf