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Market-Based Instruments for International Aviation and Shipping as a Source of Climate Finance / Michael Keen
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Keen, Michael
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Aviation.
- Carbon charges.
- Climate Change Economics.
- Climate Change Mitigation and Green House Gases.
- Climate finance.
- Energy Production and Transportation.
- Environment.
- Environmental Economics & Policies.
- Greenhouse gas emissions.
- Law and Development.
- Shipping.
- Transport.
- Transport Economics Policy & Planning.
- Local Subjects:
- Aviation.
- Carbon charges.
- Climate Change Economics.
- Climate Change Mitigation and Green House Gases.
- Climate finance.
- Energy Production and Transportation.
- Environment.
- Environmental Economics & Policies.
- Greenhouse gas emissions.
- Law and Development.
- Shipping.
- Transport.
- Transport Economics Policy & Planning.
- Physical Description:
- 1 online resource (67 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2012
- System Details:
- data file
- Summary:
- The international aviation and maritime sectors today enjoy relatively favorable tax treatment, as their fuels are not taxed and the sectors are not subject to any value-added tax or turnover tax. Nor are these fuel uses subject to any global measures to reduce their associated CO2 emissions, even though they represent at least 5 percent of the global greenhouse gas emissions. A carbon charge on fuels for international aviation and shipping equal to USD 25 per tonne of emitted CO2 could raise about USD 12 billion from aviation and about USD 26 billion from shipping by 2020. Market-based instruments ought to be used to raise such revenue, preferably charges based on the carbon contents of fuels. Such charges would also scale back emissions by at least 5-10 percent. Developing countries ought to be able to keep their own tax revenue, and additional compensation to them for the economic burdens of these carbon charges may be warranted. Such compensation would constitute at most 40 percent of the raised global revenue. Implementing these charges can be a challenge, especially for aviation, where a large number of bilateral air-service agreements would need to be rewritten.
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