To the relief of some and the dismay of others, late last month President Trump successfully punted a global energy tax down the road, forcing a delay on a vote to adopt an international carbon tax on global shipping. The motion to delay was initiated by Saudi Arabia, with the majority of the member countries in favor of waiting a year.
The International Maritime Organization (IMO), a London-based specialized agency within the United Nations (UN), was hoping to approve the Net Zero Framework (NZF) measure whose main objective was to charge companies for exceeding thresholds of greenhouse gas emissions released by their vessels.
This proposal would be detrimental to the U.S. economy, its workers, businesses, energy producers, and consumers. NZF must be prevented from reaching our shores.
Thanks to the administration’s efforts to delay its possible enaction, we are safe from the oppressive tax for now; but what happens in a year?
The UN’s top court in July asserted that the “failure of a state to take appropriate action to protect the climate system from [greenhouse gas] emissions…..may constitute an internationally wrongful act which is attributable to that state.” They include fossil fuel production, consumption, and exploration in their indictment. This opinion could be used to justify global greenhouse gas regulations, including taxes.
Congressman August Pfluger (R-TX) has spearheaded legislation that would block the UN from forcing the U.S. to be subject to any new tax that was not explicitly levied by American taxpayers’ own government. The UNtaxed Act affirms the right of the Senate to sanction any UN-imposed tax prior to its enforcement and prohibits the federal government from making financial contributions to any UN agency that attempts to impose a tax on the American people.
Lacking legal basis, the NZF would be the first global carbon tax on the industry and is estimated to increase shipping costs by at least 10 percent, rippling through supply chains and the economy. Consumers will see higher prices on everyday goods.
The $11-$13 billion generated annually would place the NZF among the largest vehicles dedicated to global climate finance. And yet, some claim that is “nowhere near what is needed to ensure a just and equitable transition.” Worse still, the IMO has limited regulatory experience in this area.
A core objective of the NZF is to eventually force operators toward switching to lower-emitting fuel alternatives by inflicting steep compliance penalties. However, replacement fuels deemed climate friendly are anywhere from two to six times the cost of what carriers currently use. Companies would also face retrofitting their fleets and potential shortages of older and newer fuels, thus confronting additional expenses. A recent study found 90 percent of major carriers pass these extra costs on to customers, often with significant markups.
One of the UNtaxed Act’s cosponsors Troy Balderson (R-TX) believes such a program would punish Americans “while undermining American sovereignty.”
The Center for Urban Renewal and Education agrees that “legislation is needed to ensure that the UN never again seeks to impose illegal taxes on the American people.”
A hot-off-the-press policy analysis concludes the NZF would only slash shipping emissions by a maximum of 10 percent by 2030, compared with the 43 percent required by the Paris Agreement. In addition to a low climate impact, the report concludes NZF offers “a weak carbon price signal, limited and unpredictable revenue, insufficient support for zero-emission fuels, distributional and equity concerns, and implementation risks.”
Such punitive measures simply impose a climate agenda on nations by redistributing the collected fees to whatever purpose the unelected UN bureaucracy deems worthy. A UN-appointed governing board could transfer funds to “reward low-emission ships,” “mitigate negative impacts” of climate change on “vulnerable States” and “just-transition initiatives in developing countries.” It’s a slush fund garnered on the backs of hard-working Americans.
The measure will cost U.S. consumers significantly for so little in return.
A UN agency should not be imposing a tax on Americans, nor should they or anyone else attempt to dictate the climate policies of other nations. While the administration promises retributive actions on those who support NZF, the UNtaxed Act offers a permanent solution through Congressional measures to ensure the tax cannot be implemented. The legislation will preclude any international entity from illegally imposing a tax on our country and restores U.S. sovereignty.
Keep international organizations out of domestic energy and climate policy issues; they belong to duly elected members of Congress.
