Analysis: The UN's plan to levy taxes on global trade is a sinister power grab

If these precedents on emissions charges and compulsory offsets stand, the appetite of unelected institutions for fiscal power will grow

International energy and climate policies stand at the center of one of the most defining political issues of our time: the expanding power of unelected institutions such as the United Nations in the lives of people in democratic societies.

Two UN agencies – the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO) – plan to tax global shipping and aviation for their greenhouse gas emissions. This would mark the first time an unelected institution has levied taxes on major sectors of global economic activity. The planned levies would expand the power and budgets of these agencies with no democratic accountability.

Regardless of one's views on climate change, proponents of democracy should recognize the threat posed by taxation without representation and oppose this power grab by the UN.

If implemented, the UN agency levies will raise global shipping and aviation costs, adding to inflation worldwide. Shipping produces just around 2 per cent of global greenhouse gas emissions, yet a UN tax on it would add costs to virtually every traded good. Shipping carries more than 80 per cent of global trade, a share expected to grow. Civil aviation accounts for approximately 2.5 percent of global emissions. The planned carbon offset requirement would add further costs to international flights.

In October 2026, the IMO will take a final vote on launching its carbon tax. The ICAO's requirement that airlines purchase carbon offsets for international flights comes into force in January 2027.

If implemented, the IMO scheme will rake in billions from shippers while doing little to lower greenhouse gas emissions: there is simply not enough zero-carbon or low-carbon fuel available that meets the IMO's criteria. The IMO estimates the scheme will add between $11bn (£8.1bn) and $13bn (£9.6bn) to its budget.

The IMO taxation scheme would at minimum double shipping fuel costs. The current generation of low-carbon fuels – hydrogen, methanol, and ammonia – are not suitable for wide use in the shipping industry. These fuels are more flammable than those in use today, increasing risks for ships and crews. If adopted, insurance costs would soar, particularly following the first inevitable accident attributable to these fuels.