Lack of alternative to RM

There is no practical alternative to the rebate mechanism for a global and differentiated MBM for international shipping.

In theory, it could be more efficient to exclude developing countries from participation in an MBM altogether, in order to comply with the CBDR and avoid the need for rebates (CBDR stands for the UNFCCC principle of common but differentiated responsibilities and respective capabilities). This would require differentiating the application of an MBM based on final destination of goods.

This option was proposed in the second generation of the IMERS proposal (2009), and was thoroughly studied. Ships transporting goods to developed countries would be covered, while ships transporting goods to developing countries would not. Ships transporting goods to both developed and developing countries would be partially covered. Such an approach would eliminate any impact on imports to the developing countries upfront.

However, the approach based on final destination of goods proved complex, particularly for container ships. It would require obtaining a verifiable share of goods transported to developed countries by each ship or company worldwide. Given the tens of thousands of ships operating worldwide, collecting and validating such information would require significant administrative efforts. This complexity was recognized also by various experts and negotiators from developing countries, paving the way for the next proposal.

In contrast, the rebate approach is much simpler than the above complete exemption of developing countries, and thus can be easily implemented globally. Only approximately a hundred fifty rebates are to be issued, one to each developing country, and the data required to calculate the rebates is readily available. Such rebates could be issued annually, or more frequently. Furthermore, it provides important additional flexibility for a country to forego the rebate or part of it.