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Today, China is speaking out against shipping taxes - they say there’s more to the story than just the green energy transition. Let’s learn more.

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Shipping Ain’t Easy

This week, China published a diplomatic note urging emerging economies to oppose new levies on the shipping industry as well as to reduce decarbonisation targets for the industry.

In particular, they argue that targets are overly ambitious and would significantly increase the cost of supply chains and the broader economy.

If there’s one thing we learnt from Covid it’s about the fragility of supply chains. The Strawman needs that sweet sweet next day delivery…

China, of course, is the world’s largest exporter with a massive state-owned shipping industry apparently delivering up to 90% of global goods - they’re arguing that these new levies are not fair for developing economies.

Everything’s a trade-off though.

Small countries like the Marshall Islands are heavily at threat from climate change and are proposing $100 a tonne emissions levies while shipping giants like China are looking to soften the transition as much as possible.

Incentives are everything, and the climate ain’t the only thing on the national agenda.

China’s not alone, other major economies such as Brazil, Argentina, and South Africa have voiced their opposition too. On top of this, in the last couple of weeks, India has repeatedly challenged incentives in the U.S. and Europe for distorting global markets - it’s not going to be plain sailing for the U.S.

The whole situation reflects a key issue of equity in the climate transition. In the note, China also called for any taxes to be reinvested in facilitating the transition thereby shifting some financial pressure off emerging economies.

It’s clear that the incentives and taxes will distort the global economy but it’s up to all countries to ensure that this is done fairly.

‘til next time.

The Strawman