An economically and legally viable mechanism for internalizing marine emissions by Ship-Emissions-Levy
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Finalist Evaluation
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Congratulations! Your proposal, An economically and legally viable mechanism for internalizing marine emissions, in the Transportation contest, has been selected to advance to the Finalists round.
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2015 Climate CoLab Judges
Additional Comments:
-An interesting proposal which is presented in a more accessible way than the previous version.
-This is a very well written proposal. it is a novel concept, and uses novel approaches to deal with specific issues, such as the use of the subsidy to incentivize shippers to improve efficiency. The law discussion is very important and seems to be solid. I also liked the discussion on the likely bye-in from customs departments.
Semi-Finalist Evaluation
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Judges'' comments
SUBJECT: Your proposal has been selected as a Semi-Finalist!
Congratulations! Your proposal, An economically and legally viable mechanism for taxing shipping fuel emissions in the Transportation contest, has been selected to advance to the Semi-Finalists round.
You will be able to revise your proposal and add new collaborators if you wish, from July 1st until July 14, 2015 at 23:59pm Eastern Time.
Judges' feedback are posted under the "Evaluation" tab of your proposal. Please incorporate this feedback in your revisions, or your proposal may not be advanced to the Finalists round. We ask you to also summarize the changes that you made in the comment section of the Evaluation tab.
At the revision deadline listed below, your proposal will be locked and considered in final form. The Judges will undergo another round of evaluation to ensure that Semi-Finalist proposals have addressed the feedback given, and select which proposals will continue to the Finalists round. Finalists are eligible for the contest’s Judges Choice award, as well as for public voting to select the contest’s Popular Choice award.
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2015 Climate CoLab Judges
It is not a good idea to copy-paste text sections of research papers in this proposal. The scheme is not clear w/o an example calculation of both competing schemes, i.e., fuel tax and cargo-based tax. The authors are required to provide a shorter and clearer proposal.
The law discussion is particularly important. Tying the tax to the consignees and consignors has a number of attractions. We also like the concept of an assumed default value to incentivize shippers to supply data.
Proposal costs are not described, so this is needed. It is also unclear what specific actions the authors would pursue in order to move their idea forward, as opposed to what governments would do.
The authors have done an excellent job in proposing a system for forcing the internalization of carbon emissions from international shipping. We would recommend the use of the word "levy" or "fee" rather than tax to make this more palatable.
While such a unilateral effort in aviation has failed, the idea of charging the consignee overcomes international legal barrier (akin to charging the arriving passenger when leaving the airport).
Nevertheless, as the authors acknowledge, the primary way for the system to actually reduce emissions would be to force international action.
There are two key deficiencies that we would suggest need to be addressed:
- how to estimate the actual price of the carbon fee
- how to use the revenues from this system (which should avoid the pitfalls of the aviation ETS)
- whether to tie it or not with the ETS (in which case the price would vary)
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 Dirk Heine Jul 14, 2015 07:58  | Proposal contributor
Dear Judges,
We are very grateful for your helpful in-depth feedback regarding our proposal. We have tried as best as we could to improve our proposal along your comments.
In particular, we have made the following improvements (in the order of your comments):
1. We have modified the proposal in order to make it clearer and easier to follow. We are sorry for having invoked the impression that we have copied sections from our research paper into the previous version of the proposal. In particular, we rewrote the section "What actions do you propose". It now features five separate sections. The first section describes the first part of our mechanism to internalize maritime emissions, the emission levy on international shipping. The second section describes the second part of the mechanism, the fuel levy on domestic shipping. In the third section we explain how the mechanism is designed to overcome extraterritoriality restrictions. The fourth section expands on how the proposed unilateral mechanism will pave the way to an international agreement on the matter. In the fifth section we illustrate how the generated revenues will be distributed.
2. We have included an example calculation of both competing schemes, i.e., the fuel levy and the cargo-based levy, to better explain the mechanism.
3. We have inserted a table with estimates of the proposal's costs that would arise if the EU introduced the mechanism. The economic costs are provided in percent of GDP for major regions and countries. Administrative costs depend heavily on the given country so that unfortunately we were not able to provide an overview here. For the EU (and to a lesser extend also the US) administrative costs would be very low, however, as the mechanism reuses existing databases and custom transactions. Furthermore, the system of taxing on default values and rebating upon proof of better performance helps to reduce administration costs. Lastly, the way how we distribute the tax liability and the subsidy eligibility between the shipping company and its customers is the arrangement with the least administration and compliance cost.
4. We have inserted a section on what specific actions we already have pursued and will pursue in order to move our proposal forward.
5. We have replaced the term "tax" by "levy" to make the proposal more palatable.
6. We have included a paragraph explaining how to estimate the actual price of the carbon fee.
7. We have added a paragraph to explain how the mechanism should be tied with the ETS.
8. We have included a paragraph to illustrate how the revenues from the scheme would be used.
9. We have inserted an image to illustrate that the emission levy we propose would only cause minimal carbon leakage.
10. We have extended the legal analysis and the explanation on how the unilateral mechanism would enable an international agreement.
11. We have added an estimate of emission reductions in absolute numbers.
12. We have updated the paper accompanying our proposal to address each of the concerns that you raised in more detail.
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