AGF Report

The High-level Advisory Group on Climate Change Financing (AGF) has published its AGF report (0.3MB), as well as eight working papers, including on International Transport (0.7MB). Our Rebate Mechanism is described as a way to compensate cost burden (incidence) on developing countries from carbon price on international transport.

The AGF, established by the UN Secretary General in February 2010, was asked to study potential sources of revenue for financing mitigation and adaptation activities in developing countries.
The final AGF report (0.3MB) was delivered to the UN SG on 5 November 2010 by the AGF co-chairs Prime Minister Meles Zenawi (Ethiopia) and Prime Minister Jens Stoltenberg (Norway). The report concludes that it will be challenging but feasible to mobilise USD 100 billion annually for climate actions in developing countries by 2020. The Group identified a number of different sources that could contribute to reaching this goal.
One of important sources is international transport (shipping and aviation).

Cost Burden in International Transport

An important consideration is how to eliminate or compensate cost burden (incidence) on developing countries from carbon price on international shipping, and aviation. For shipping, the report uses the 30% estimate of cost burden on developing countries based on share of imports, proposed by us. The paper on International Transport (0.3MB) quotes the Rebate Mechanism proposal , developed by us. It further uses the proposal to illustrate that it would be possible to design a mechanism to ameliorate the cost impacts on developing countries (see for instance paragraphs 65, 147-151).
More analysis will follow.