Bunker Fuel Bans and Anti-Trade Collusion: Enviros, the World Bank, and the United Nations

A few weeks ago, I wrote about the pending ban on ships carrying or using bunker fuel in the antarctic (set to go into effect in July) and radical environmentalists’ attempts to convince the United Nations’ International Maritime Organization (IMO) to extend the ban to the arctic. Now the greens have convinced the bureaucrats at the World Bank to call for large carbon taxes on bunker fuel and aviation fuel, ostensibly to finance a climate-change relief fund for developing nations:

The World Bank is focusing on a levy on shipping and jet fuels in a report to G20 finance minister in October, among other efforts to keep climate action on track.

“We are looking at carbon emissions-based sources … including bunker (shipping) fuels and aviation fuels, that would be internationally coordinated albeit nationally collected,” said Andrew Steer, World Bank special envoy for climate change.

The Bank estimates the extra cost to help the developing world prepare for more droughts, floods and rising seas at $100 billion annually. Various sources put the extra cost of cutting carbon emissions at $200 billion or more annually.

Steer said he was disappointed by the pace of a U.N. climate process which launched talks in 2007 to find a Kyoto successor.

“I’ve got to say the situation is very urgent and sometimes that sense of urgency is not evident in the negotiations.”

Steer, some of you might recall, is the long-time British technocrat who was Staff Director of the World Development Report 1992: Development and the Environment, the main World Bank document at the Rio Summit and arguably the document most responsible for ushering the eco-apocalypse mindset into the mainstream policy world. Steer recently returned to the World Bank after holding domestic policy positions in his home country.

As opposed to the IMO polar ban on vessels loaded with bunker fuel, which focused on toxic sulfur dioxide (SO_x) and nitrogen dioxide (NO_x) particulate pollution, the World Bank is focusing on non-toxic carbon dioxide (CO₂) emissions. The ongoing operations of the maritime industry, the most crucial facilitating sector of the $16 trillion in annual global trade, are responsible for approximately 3.3 percent of global human CO₂ emissions (2.7 percent from international shipping and 0.6 percent from domestic shipping and fishing), while the aviation industry is responsible for about 2 percent. That’s 5.3 percent of human-caused CO₂ emissions for both of these highly important transport industries.

The International Air Transport Association has called a proposed European tax on aviation emissions illegal and China is currently up in arms over developed nations’ assault on their bunker fuel–powered ships (including by the U.S. via California’s Air Resources Board). Pursuing taxes on bunker fuel and aviation fuel at the international level will quite possibly lead to at best a series of sector-specific trade disputes and at worst a protracted trade war between mid-stage developing countries and the wealthy West.

As for the climate change relief fund these taxes are supposed to finance, the United Nations admits that best-case-scenario revenue estimates are $25 billion to $34 billion annually by 2020 (the low estimate is $12 billion combined from taxes on both bunker fuel and aviation fuel; see page 28), when the $100 billion fund is supposed to be up and running. So where will the other $70-billion-plus come from annually? According to the United Nations (page 7):

All analyses of bunker taxes (whether national, regional or international) have found that whatever type of tax is implemented, it is unlikely to raise enough per year to fulfil the $100 billion a year promise, or even the $50 billion per year of this needed for adaptation. Therefore, if such taxes are implemented, they will need to be accompanied by another innovative finance mechanism such as a Financial Transaction Tax.

Oh, the Financial Transaction Tax — better known as the “Robin Hood Tax.” A financial transactions tax would devastate the financial sector, and further restrict access to credit — thereby preventing much-needed investment in the economy. But this should not be surprising. The environmentalists and many of the eco-technocrats at the World Bank, United Nations, and other useless international governmental organizations are attempting to “sustain the environment” by killing economic growth. Their foolish agenda, if they have their way, will foist on the developing world the most destructive and deadly collectivist economic policies since the Great Leap Forward — and the outcomes could very well dwarf Chairman Mao’s three-year Chinese genocide in terms of magnitude.