How African countries can gain billions in a global shipping levy

The global shipping industry plays a vital role in the movement of goods across the world, including within Africa's blue economy. However, it is also a significant contributor to greenhouse gas emissions, accounting for 3 per cent of emissions globally. This fact has raised concerns about the environmental impact of shipping and has prompted discussions about the need for decarbonization measures. In a recent interview with Maritime Policy Consultant Eldine Chilembo Glees, key issues related to the global shipping levy and its potential implications for African countries were discussed in detail. African countries heavily rely on the shipping industry for trade and food security, making it a crucial component of the continent's economic development. However, the industry's environmental footprint cannot be overlooked, especially in light of the disproportionately adverse effects of climate change on African nations. Recognizing this, the International Maritime Organization (IMO) has set ambitious decarbonization targets aimed at aligning with the goals of the Paris Agreement. These targets include technical and economic measures, such as a proposed levy on shipping emissions. The introduction of a global shipping levy poses both challenges and opportunities for African countries. One of the key concerns is the potential impact on import and export costs, as seen with the EU Emissions Trading Scheme, which imposed a significant financial burden on countries like Ghana. The debate at the IMO revolves around two main proposals: a levy system endorsed by Pacific Island countries, some Caribbean nations, and the EU, and a flexible mechanism system based on credit trading. The levy system, supported by various stakeholders, including the shipping industry itself, aims to generate substantial annual revenue of up to 60 billion dollars. The funds collected under this system would be distributed based on the 'polluter pays' principle, ensuring that countries most affected by climate change receive the necessary resources to transition to greener technologies. This approach not only levels the playing field but also incentivizes the development of sustainable alternatives to fossil fuels, ultimately benefiting African nations. On the other hand, the flexible mechanism system, centered on credit trading, raises concerns about its effectiveness in achieving decarbonization targets. By allowing ship owners to purchase credits to continue polluting, this system may undermine efforts to reduce emissions and address climate change. For African countries, active participation in the discussions at the IMO is crucial to secure a favorable outcome that aligns with their economic interests and sustainability goals. Eldine Chilembo Glees emphasized the importance of African representation in shaping the regulations and distribution of funds generated from the shipping levy. With April marking a crucial juncture for the IMO to finalize its decisions, African maritime administrators and experts must actively engage in advocating for policies that benefit their domestic shipping sectors. Failure to participate effectively in these discussions could result in African countries being sidelined and disadvantaged in the distribution of resources. As the global shipping industry undergoes a transformation towards decarbonization, African countries have a unique opportunity to drive sustainable development and mitigate the impacts of climate change. By collaborating and advocating for their interests at the international level, African nations can ensure that the benefits of the global shipping levy are equitably distributed. The decisions made in the coming weeks will shape the future of shipping and environmental sustainability for years to come.