[080611.EN.AIR] World Bank Seeks CO2 Jet Fuel, Bunker Tax, EU To Tax In 2012, IATA Cries Foul

THE World Bank plans to press for a global tax on jet fuel and bunker at the G20 summit in October to raise money to fight alleged global warming, the extend and existence of which is subject to increasing doubt.

So much so that it looks unlikely that the once binding measures of the Kyoto Protocol cap are unlikely to be renewed when they expire next year. So the World Bank is focusing on a tax on bunker and jet fuels in its recommendation to G20 finance ministers, said World Bank climate change envoy Andrew Steer.

The European Union also plans to introduce carbon taxes on airlines next year and the International Air Transport Association (IATA) is vociferous in its objection.

"They are ignoring international law with plans to include international aviation," departing director general Giovanni Bisignani told 700 industry delegates attending IATA's annual meeting in Singapore.

Calling the scheme a "$1.5 billion cash grab," Mr Bisignani said it would do nothing to reduce emissions. "Uncoordinated punitive measures undermine global efforts, and distort markets," he said, according to London's Financial Times.

His comments follow complaints from Airbus CEO Tom Enders who said the European scheme risks triggering retaliatory action by China, which opposes the move. US airlines have also challenged the plans before the European Court of Justice.

Unlike the aviation sector, objections to eco-taxes come not from carriers, but from shippers, the customers of shipping lines. Big carriers are not hostile to eco-regulations because the more there are, the harder it is for smaller players to meet the costs imposed, thus increasing market share for the bigger ones.

Thus, the International Chamber of Shipping (ICS), which represents all segments of the maritime shipping world, but has close ties to eco-friendly intergovernmental organisations like the United Nations and its agencies, favours a worldwide eco-tax on bunker.

It is in talks with the UN's International Maritime Organisation (IMO) to accept the scheme as a means of heading off national, regional and even provincial regulation, including emissions trading schemes.

So shippers, who pay the tax in the end, are angry, with the Global Shippers' Forum (GSF) saying it will oppose further bunker levies on shippers to raise money for environmental causes.

GSF secretary general Chris Welsh said: "Merely passing on shipping carbon costs to their customers via a bunker levy not only removes shipowner accountability but will not reduce carbon emissions."

Global shipping and aviation emissions are not affected by Kyoto. The EU plans to tax flight emissions to and from Europe from January, an illegal move, according to the International Air Transport Association (IATA).

The World Bank's Mr Steer told Reuters that developed countries have already abandoned efforts to seek a new binding agreement at a UN's G20 October conference in Durban. This turns activists' attention to left-over categories like fund-raising.

"We are looking at carbon emissions-based sources including bunker and aviation fuel, that would be internationally coordinated albeit nationally collected," said Mr Steer.

The world welfare bank, dedicated to poverty reduction, wants the tax to raise US$100 billion a year, citing more strident voices demanding $200 billion.

Source : HKSG, 08.06.11.