Dr Peter Nuttall, the scientific and technical advisor to the Micronesian Center for Sustainable Transport, discusses disbursement of revenues generated by IMO’s emission reduction measures. The International Maritime Organization’s 2023 Revised Strategy for reduction of emissions from ships includes provisions which direct a just and equitable transition. Under the agreed timelines, IMO member states must secure agreement on both technical and economic elements in the basket of measures to reduce GHG emissions by April 2025. The various combinations of measures proposed all entail a degree of revenue generation. The scale of revenues expected is unclear. The most ambitious proposal sponsored by most Pacific Small Island States and Belize sets an initial price on GHG of $150/tonne CO2-equivalent, potentially generating an average of $60-90billion a year. A number of other proposals request various so-called ‘flexibility’ mechanisms, including public and private emissions credit and compliance trading, feebates or penalty/reward schemes and performance subsidies. There is less specificity on the scope of use of those revenues – from primarily favouring investment in reward subsidisation for highest performing ships through to proposing the majority of revenues be committed to investment in the priority needs of the global south, particularly the climate most vulnerable states. Decisions on how much revenue will be generated, how it is to be disbursed and who will manage it has yet to occur. The poorest and climate most vulnerable States are now in a conundrum. On the one hand they cannot survive current global warming scenarios and are already paying the highest and earliest costs. Ultimately the most vulnerable, particularly the atoll nations, will simply cease to exist as viable entities. On the other hand, these States cannot afford to match-step a global or large economies’ decarbonisation transition with sufficient direct investment in their own maritime and other critical sectors. Without appropriate external assistance, these states face increasing inequity as other nations transition. Paragraph 4.5 of the IMO Strategy sets out the agreed three objectives. IMO must promote the energy transition to new technologies and fuels, it must incentivise the fleet and it must contribute to a level playing field and a just and equitable transition for all. If a durable and sustainable solution is to be achieved, a number of underlying revenue narratives need to be considered. The IMO Strategy is silent on how the three Paragraph 4.5 objectives are to be balanced and which has priority, if any. The issue of revenue disbursement is where negotiations ultimately failed more than a decade ago. The underlying assumption then was that shipping would use some form of offset trading scheme to essentially buy its way out of its emissions. IMO reported to UNFCCC in 2009 that it supported revenue use for a broad range of priorities, including mitigation of shipping emissions and wider development and climate change goals. The negotiations then ultimately failed at the developed/developing nations firewall of that time. The emissions pricing can was effectively kicked down the road for more than a decade. If a 1.5oC agenda is to be upheld in any shape or form, it can be kicked no further. Climate change warnings have hardened dramatically since and the global carbon budget available has shrunk equally drastically. The cost of inaction for shipping is re