A new report, authored by RTI International for Environmental Defense Fund (EDF), reveals that the global shipping and port industry is susceptible to billions of dollars in infrastructure damage and trade disruption from climate change impacts.
he report “Act Now or Pay Later: The Costs of Climate Inaction for Ports and Shipping” explores data on climate-related disasters and projects the cost of future damages to the industry.
Just as the COVID-19 pandemic threw our ports and the global supply chain into crisis mode, the climate emergency will have major consequences for international shipping
said Marie Hubatova, senior manager for EDF’s Global Transport team.
Based on past impacts and anticipated climate change scenarios, the report projects that the additional annual damages to port infrastructure could reach nearly US$ 18 billion by 2100.
More specifically, storm-related port disruptions could add another US$ 7.5 billion each year, reflecting the economic losses incurred by ports, shippers, and carriers due to port closures and the costs to shipping customers. Together, these added future costs due to climate change are roughly equivalent to the total annual net earnings for the container port sector in 2019.
In addition, the report also summarizes existing evidence and estimates of the impacts and costs of climate-related hazards, finding that data on this topic is sparse or completely lacking for many areas. The lack of data means that the shipping industry does not have a clear picture of future circumstances and future costs could be far higher than estimated here.
Considering the unpredictable volatility of climate change and the immense complexity of the shipping sector, we simply need more data to show the full picture. However, the available evidence strongly indicates that the costs will be great
said George Van Houtven from RTI.
However, the report notes that the industry can take several steps now to advance the transition to green shipping and reduce future climate change costs, including:
- Committing to full decarbonization by 2050, in line with the Paris Agreement.
- Supporting a market-based mechanism to reduce shipping emissions at the International Maritime Organization.
- Investing in zero-emission fuels and technology.
- Supporting an equitable transition for the shipping industry to ensure the brunt of damages and adaptation costs do not disproportionately fall on developing nations.