CURRENT AFFAIRS
CURRENT AFFAIRS
Description
In a landmark move, India joined 62 other nations in supporting the world's first global carbon tax on the shipping industry, as adopted by the International Maritime Organization (IMO) during a recent meeting in London. This decision is a crucial step toward aligning global maritime practices with climate goals and reflects India’s growing commitment to sustainable development.
Understanding Carbon Tax: A Tool For Environmental Accountability
A carbon tax is a market-based mechanism aimed at reducing greenhouse gas (GHG) emissions. It imposes a fee on the carbon content of fossil fuels such as coal, petroleum, and natural gas. The underlying principle is simple: the more a fuel emits carbon dioxide or other greenhouse gases, the higher the tax.
The purpose of the carbon tax is twofold:
To deter pollution by making high-emission fuels more expensive.
To encourage cleaner, renewable alternatives by improving their cost competitiveness.
By internalizing the external cost of emissions (i.e., the environmental damage caused by pollution), a carbon tax incentivizes energy efficiency, technological innovation, and sustainable development.
Types Of Carbon Taxes And Market Mechanisms
Carbon taxes can take multiple forms depending on how they are implemented:
Emissions-Based Tax - Charges are levied directly on the quantity of GHGs emitted, determined by the carbon content of the fuel.
Energy Consumption Tax - Targets fossil fuel usage regardless of the emissions released, often used to reduce dependency on non-renewable energy.
Cap-and-Trade System - Establishes an upper limit (cap) on emissions and allows companies to buy and sell emission permits, creating a financial incentive for reductions.
Border Tax Adjustments - Taxes are applied to imported goods based on the emissions associated with their production, to avoid “carbon leakage” (outsourcing emissions-intensive industries to countries with lax regulations).
India’s Position On Carbon Taxation
Although India has not yet implemented a national-level carbon tax, discussions around its potential have been ongoing for over a decade. In 2015, the Indian government proposed a modest carbon tax of ?50 per metric ton of coal produced or imported. However, the proposal has yet to be enacted on a national scale.
At the state level, regions like Tamil Nadu have experimented with levies on coal used for power generation, signaling localized commitment to decarbonization.
India supports emissions reduction through several proactive initiatives, including:
National Clean Energy Fund (NCEF): Finances clean energy projects using revenues collected from coal cess.
National Solar Mission: Promotes the large-scale deployment of solar power to transition away from fossil fuels.
Energy Conservation Building Code (ECBC): Sets energy-efficiency standards for buildings to minimize power usage and emissions.
About International Maritime Organization (IMO)
The International Maritime Organization (IMO) is a specialized agency of the United Nations responsible for regulating international shipping. Headquartered in London, the IMO sets global standards to ensure the safety, environmental performance, and security of maritime transport.
Key functions of the IMO include:
Drafting and implementing global maritime rules and conventions.
Overseeing regulations related to marine pollution, vessel safety, and legal matters like liability and compensation.
Supporting Sustainable Development Goal (SDG) 14, which aims to conserve and sustainably use ocean and marine resources.
Although IMO regulations are global in scope, their enforcement depends on individual member states incorporating these rules into their national legal frameworks.
Significance Of Global Shipping Carbon Tax
The adoption of a global carbon levy on shipping represents a bold step toward decarbonizing one of the world’s most critical and carbon-intensive industries. Shipping accounts for nearly 3% of global CO? emissions, and this new tax is expected to push companies to invest in cleaner fuels, energy-efficient vessels, and sustainable supply chains.
By supporting this initiative, India has aligned itself with global efforts to mitigate climate change, while potentially opening new avenues for green technology and maritime innovation within the country.
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