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Paris Summit: No Deal on Global Shipping Tax

More than 20 countries and regional organizations have backed proposals for a levy on shipping industry emissions ahead of an International Maritime Organization (IMO) meeting next month, the French presidency said at the end of a Paris summit. Shipping, which emits 2.9% of total greenhouse gases, has largely escaped taxation because the high seas are not in the jurisdiction of any one government. If the IMO, the United Nations body which regulates shipping, taxed carbon emissions, it would encourage shippers to go green faster. The body could then channel the money raised, perhaps $100 billion a year, to poorer countries to help them cope with climate change. The Associated Press has the story:

Paris Summit: No Deal on Global Shipping Tax

Newslooks- PARIS (AP)

Participants at a Paris summit stopped short Friday of a deal to create a tax on greenhouse gas emissions produced from international shipping, leaving climate NGOs and activists lamenting the lack of ambitious responses to fight climate change and the world’s inequalities brought forward at the meeting.

The two-day gathering of world leaders and finance bosses ended without a major announcement, though organizers did release a promised “road map” aimed at fulfilling French President Emmanuel Macron’s pledge to assess reforms of the international finance system over the next two years.

French President Emmanuel Macron, right, thumbs up as he welcomes Brazilian President Luiz Inacio Lula Da Silva before a working lunch Friday, June 23, 2023 at the Elysee Palace in Paris. World leaders and finance bosses were set to release a “to-do list” to help developing countries better tackle climate change and poverty, a long-sought goal of the two-day summit in Paris that wraps up on Friday. (AP Photo/Christophe Ena)

“We need to be clear that if we don’t change the institutions, the world will remain the same,” Brazil’s President Luiz Inácio Lula da Silva said. “Those who are rich will stay rich. Those who are poor will remain poor. This is the way it is.”

The idea of a global tax on the greenhouse gas emissions produced from international shipping has been gaining traction and could potentially be adopted at a July meeting of the International Maritime Organization, the United Nations agency regulating shipping. The money could be directed toward developing countries to help them deal with climate change.

From the left, Kristalina Georgieva, President ff the International Monetary Fund, ,William Ruto, President of Kenya, French President Emmanuel Macron, U.S. Treasury Secretary Janet Yellen and World Bank President Ajay Banga attend a joint press conference at the end of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris.World leaders and finance bosses were set to release a “to-do list” to help developing countries better tackle climate change and poverty, a long-sought goal of the two-day summit in Paris that wraps up on Friday. (AP Photo/Lewis Joly, Pool)

Some experts believe that a tax on shipping alone could raise $100 billion a year, and a strong endorsement of it in Paris would have provided Macron with a symbolic win.

“This is tax-free sector. And there’s no reason why it’s not taxed,” Macron said. But the French president, who hosted the summit, suggested that China and the U.S were not supporting the idea.

“If China and the U.S. and several key European countries are not on board, then you would put a tax in place that would not have any impact,” he added.

CORRECTS SPELLING OF NAME Egyptian President Abdel Fattah el-Sissi, left, German Chancellor Olaf Scholz and Zambian President Hakainde Hichilema listen during the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris. The aim of the two-day climate and finance summit was to set up concrete measures to help poor and developing countries whose predicaments have been worsened by the devastating effects of the COVID-19 pandemic and the war in Ukraine better tackle poverty and climate change. (AP Photo/Lewis Joly, Pool)

U.S. Treasury Secretary Janet Yellen, who attended the summit, called the tax “a very constructive suggestion” and said the U.S. would look at it.

It was unclear which countries at the summit supported the proposal, which could be an important step toward getting a heavily emitting industry to pitch in to the cost of fighting climate change. The French presidency said 23 nations, which were not identified in the official statement, backed the initiative.

Shipping accounts for almost 3% of greenhouse gas emissions, according to the International Maritime Organization. A European Parliament report has warned that share could increase dramatically by 2050.

French President Emmanuel Macron, center, and other leaders attend the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris. The aim of the two-day climate and finance summit was to set up concrete measures to help poor and developing countries whose predicaments have been worsened by the devastating effects of the COVID-19 pandemic and the war in Ukraine better tackle poverty and climate change. (AP Photo/Lewis Joly, Pool)

The gathering had no mandate to make formal decisions, but Macron had pledged to deliver a to-do list that would be accompanied by a progress-tracking tool. A 15-page document released soon after the summit ended relied heavily on calls for action by groups like the World Bank, International Monetary Fund and others, such as changing the way risk is calculated on projects in the developing world and financing projects with local currency.

Both moves could reduce borrowing costs that are typically much higher for low-income nations that often face massive challenges in adapting to climate change at the same time they’re confronted by poverty and myriad other issues.

China’s Prime Minister Li Qiang arrives for the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris. The aim of the two-day climate and finance summit was to set up concrete measures to help poor and developing countries whose predicaments have been worsened by the devastating effects of the COVID-19 pandemic and the war in Ukraine better tackle poverty and climate change. (AP Photo/Lewis Joly, Pool)

South African President Cyril Ramaphosa said during the closing ceremony that African nations are not “beggars.”

“It’s important in the new era where the world is in now, that there should be a good measure of equality among sovereign nations … We should go to demonstrate that Africa should never be seen as a continent that needs generosity. We want to be treated as equals.”

During the summit, the World Bank announced a plan to provide a pause in debt repayments for the most vulnerable countries when they are hit by a crisis or catastrophe.

US Climate Envoy John Kerry arrives at the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris. World leaders and finance bosses were set to release a “to-do list” to help developing countries better tackle climate change and poverty, a long-sought goal of the two-day summit in Paris that wraps up on Friday. (AP Photo/Lewis Joly, Pool)

The International Monetary Fund has made $100 billion worth of assets — called Special Drawing Rights — available to certain vulnerable countries. The French presidency then said France would share 40% of its own assets from the COVID-19 pandemic.

The summit’s first day included announcements of a pair of deals. French officials said debt-burdened Zambia reached a deal with several creditors including China to restructure $6.3 billion in loans. And Senegal reached a deal with the European Union and western allies to support its efforts to improve its access to energy and increase its share of renewable energy to 40% by 2030.

NGOs and climate activists noted some positive outcomes from the summit, yet said it doesn’t go far enough.

Climate activists stage a protest in the Place de la Republique on the sidelines of the Global Climate Finance Summit in Paris, Friday, June 23, 2023. World leaders, heads of international organizations and activists are gathering in Paris for a two-day summit aimed at seeking better responses to tackle poverty and climate change issues by reshaping the global financial system. (AP Photo/Michel Euler)

“We are disappointed to see that most leaders of the world’s richest nations and most powerful institutions have once again gathered and emerged with insufficient solutions and lightly held promises,” Global Citizen and its partners said in a statement.

“By steering closer to private finance sources and tweaking on the edges of existing multilateral development banks, the summit merely dressed the old in new packaging, such as by suggesting ‘debt pauses’ for poor countries hit by disasters rather than full debt cancellation,” Climate Action Network said in a statement.

Egyptian President Abdel Fattah el-Sissi arrives for the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris. The aim of the two-day climate and finance summit was to set up concrete measures to help poor and developing countries whose predicaments have been worsened by the devastating effects of the COVID-19 pandemic and the war in Ukraine better tackle poverty and climate change. (AP Photo/Lewis Joly, Pool)

Activists have hoped for a tax on the fossil fuel industry and another one on financial transactions, but neither proposal appeared to have much support from wealthier nations.

“Silence on the fossil fuel industry paying for the mess they have caused was deafening at this summit,” Tracy Carty, climate politics expert at Greenpeace International, said.

Climate activists wearing the masks of world leaders, from left; French President, Emmanuel Macron, World Bank President Ajay Banga, German Chancellor, Olaf Scholz and US President, Joe Biden, stage a protest in the Place de la Republique on the sidelines of the Global Climate Finance Summit in Paris, Friday, June 23, 2023. World leaders, heads of international organizations and activists are gathering in Paris for a two-day summit aimed at seeking better responses to tackle poverty and climate change issues by reshaping the global financial system. (AP Photo/Michel Euler)

Many officials from poor and climate-vulnerable nations attended, with only two top leaders from the Group of Seven most developed countries — Macron and German Chancellor Olaf Scholz — in the audience. The U.S. was represented by Yellen and climate envoy John Kerry. Other attendees included China’s Prime Minister Li Qiang, World Bank head Ajay Banga and IMF President Kristalina Georgieva.

Climate activists gathered in central Paris on Friday to ask for polluters to pay for climate damage.

Climate activist, Greta Thunberg, center, participates in a protest on the sidelines of the Global Climate Finance Summit in Paris, Friday, June 23, 2023. World leaders, heads of international organizations and activists are gathering in Paris for a two-day summit aimed at seeking better responses to tackle poverty and climate change issues by reshaping the global financial system. (AP Photo/Michel Euler)

“There will be no climate justice without making the polluters pay,” said Patience Nabukala, part of the Fridays for Futures Uganda activist group. “People from countries like mine, we cannot afford to lose more lives, we cannot afford to lose more properties.”

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