A Carbon Levy for International Maritime Fuels

The International Maritime Organization has pledged to reduce carbon emissions from the shipping industry by at least 50 percent below 2008 levels by midcentury. The next step is to design a strategy for implementing this commitment. A carbon levy for international maritime fuel is a critical component of this strategy because it provides across-the-board incentives for near-term mitigation, the robust price signal that is ultimately needed for deploying zero-emission vessels (ZEVs), and near-term funding for R & D and infrastructure investment for ZEVs. This article discusses the rationale for an international maritime carbon levy, key design and implementation issues, and the environmental impacts of such a levy.